How do I plan/manage a large project?

How much goes back to the government when they invest in a large infrastructure project like a national sports stadium?

• This is probably economics 101, but I don't know the answer and it might interest a lot of people to find out the reality. If the government (pretty much any government) invest in a large infrastructure program (say a national sports stadium) and it costs a couple of billion (dollars, euros, pounds). That money goes into paying for fees, services, materials, labour etc. In the instance where it pays for labour, assuming the labour is not imported, that pay is taxed (+gov) then the labourer spends it on living costs: buys food and goods which are taxed (+gov), pays rent (rent goes to corporations or individuals who either pay tax on profits (+gov) or invest it back or spend it on more fees, services materials, labour ad infinitum). If that labourer is left with anything at the end of the week, he might save something (probably under the mattress). Everything he spends goes back into the chain which is incrementally taxed again and again. If the money goes on materials, they might be imported (and suffer import duties (+gov)) or they might be local, in which case that money goes to pay for more running costs (fees, services, materials, labour etc) and around we go again. Fees go to companies who pay their employees salaries who go out and spend it in the same way and might invest their surplus in the stock markets (stockbrokers taxed on profits (+gov), the money in investments goes to fund corporations and so on who, yet again spend it on fees, services, materials, labour etc). If people make capital gains on their investments, they pay tax on those gains (+gov) and then they spend the rest. Etc. Etc. Even if they build up significant non-monetary assets (by transferring money to others who then feed the same chain) those get taxed when they die. It seems to me that eventually, apart from the money that goes out of the country to pay for imported goods and labour or stays under the mattress, almost all of it winds up back in the government's coffers. So how much does it really cost – eventually – to build a two billion dollar stadium?

• Answer:

  When such projects are undertaken, many complicated arrangements are behind them.  Government offers incentives to sports teams in the form of tax breaks and other financial incentives.  Municipalities that are savvy may also get terms that help mitigate negative effects due to the development (e.g. Traffic and other infrastructure issues). I think each such arrangement has the potential to have different overall effects on the sponsoring government.