Irrational Budgeting and its Impact on the Performance of Complex, Long Term and Multidimensional Mega Events

The hosting of mega events has been actively pursued by some of the world major countries as a way to fast track their urban regeneration agenda and stand out among the global competition for international capital; such events have long lasting impacts on the economy of a host country. Efficient budgeting and control plays a vital role in the successful hosting of mega events and to enhance the economy of a hosting city/country. The present study has been conducted to ascertain the impact of irrational budgeting on the performance of complex, long term and multidimensional mega events. The analysis was conducted on two editions of Commonwealth Games in relation to its impact on the economic standards of a hosting country. The study further revealed the importance of a rational budget for the successful completion of such types of mega events. This study uses a Computable General Equilibrium (CGE) model due to the size and relative significance of the event. In terms of the impact on the Victorian economy, the Commonwealth Games 2006 Victoria was estimated to result in an increase in Gross State Product of around $1.6 billion and employment of around 13,600 jobs. By contrast, the bid for the Commonwealth Games 2010 Delhi, estimated an all inclusive cost of just `1200crore, which was increased more than 15 folds and the overall budget estimate for the Games has risen to `18,532crore. The precipitous increase was compounded by several instances of lack of financial prudence and propriety across the range of implementing agencies.