The Rio Olympics have not yet proved to be the disaster that some had feared. Zika still lurks about, of course, but we haven't heard the kind of humiliating tales of catastrophes small and large that dogged the Sochi Winter Olympics in 2014.
The best case, however, is still a disaster — for the host. Brazil has spent an estimated $12 billion on the Games, and while much of it has gone to upgrading infrastructure, much of it doesn't have great long-term payoffs, such as arenas in which to stage little-watched events. This by a country whose economy has been rocked recently by the bursting of the global commodity bubble.
"Disaster" is not hyperbole. When I was in Greece last year to report on the elections and the refugee crisis, virtually everyone I spoke to agreed that the 2004 Athens Olympics had been the apex of modern Greece. Virtually everyone I spoke to also agreed that the Games had dealt a painful blow to Greece's economic condition. The government borrowed a great deal of money to spend on facilities that couldn't be used for anything after the Games had passed.
Nor is this unusual. Local boosters frequently argue that the Olympics will produce a veritable tsunami of economic benefits. The reality, as the Economist says, is that "prudent city governments should avoid the contests at all costs." This does not really capture it. Prudent city governments should run screaming from any proposals to host the Olympics, and napalm the spot where the proposals were found, just to be safe.
Start with all of those custom facilities, which have to be built quickly and to an absolutely hard deadline. (Hello, cost overruns!) Add in the need to transport people between the venues, requiring costly infrastructure upgrades. Toss in the fact that after the Olympics have passed on to the next population center, all of those sites will need to be maintained — or turned into something else. You can see how this might be bad news for prudent fiscal types.
And the economic benefits? Cities that host the Olympics don't even necessarily see a burst of tourism. Although the Olympics certainly attract a lot of sports fans, they scare off a lot of other tourists who want to avoid the traffic and other associated headaches. According to the Economist, "Beijing and London both attracted fewer visitors during their Summer Olympics in 2008 and 2012, respectively, than they had in the same period a year earlier."
And while some of the facilities can be repurposed for revenue-generating sports, that's less comfort than you'd think, because publicly financed stadiums in general have a lousy record at boosting local economic activity.
And while some of the infrastructure improvements, such as investment in roads, may pay off, the fact that these investments are concentrated on moving people between Olympic venues, rather than moving people to places they go during the 99 percent of their lives when the Olympics are not in town, makes even this potential upside dubious.
