In Praise of the Olympics

Matt writes:

New York Times article about the Obama administration’s involvement in Chicago’s 2016 Olympic bid once again reminds me of how crazy all the Olympic-related lobbying seems. Is there any reason to think these events are actually beneficial? The main sense in which you can imagine a city being made better off by hosting an Olympics is that the hosting duties may cause it to invest in some useful infrastructure that pays off. But if that’s the case the infrastructure investments would have paid off even if there had been no Olympics. The name of the game is to identify useful infrastructure opportunities and build what’s worth building. If anything, pegging the investments to a one-off multination sporting event seems likely to cloud thinking about what is and isn’t truly needed.

Sure, in an ideal world leaders would evaluate infrastructure needs and build the things that are worth building, but as Matt well knows, we don’t live in an ideal world. The Olympics can help to align the interests of fractious local governments and increase public acceptance of tax increases. And it can fix the time problem of infrastructure investment. Infrastructure benefits begin appearing years down the road and last for decades beyond that, while many of the costs — the political headaches, the need to put together financing, the disruption of construction, and so on — are relatively immediate. Winning the Olympics ties an immediate benefit to the immediate costs — we’re facing all these headaches, but it’s worth it because we won the Olympics. The games give a short-sighted electorate a reason to invest for the long-run.

Comments

  1. One big plus for the Olympics: unlike landing a major sports franchise, the town fathers won’t shell out more big piles of money every 20 years or so to keep it around.

  2. Judge Glock says:

    Sure, but most Olympics are money-sinks infested with fraud and waste, which is why most cities don’t want to bid on them. See…

    http://www.newgeography.com/content/001042-olympics-chicago-way

    If you think white elephant stadiums and the roads to reach them are an essential infrastructure element than the Olympics makes sense. Otherwise, a one-time burst of spending doesn’t help a town, and there’s absolutely no evidence to show it does. Not to bring up the obvious, but anybody remember Saravejo? Or just look at all the empty stadiums Beijing has acquired:

    http://www.findingdulcinea.com/news/sports/2009/feb/Beijing-s-Empty-Venues-Reveal-Heavy-Cost-of-Olympics.html

    Vancouver’s already had their credit rating lowered because of the cost of financing their 2010 Olympic town. Or see London’s coming troubles…

    http://abcnews.go.com/Sports/wireStory?id=7976066

    That’s the typical Olympic story, not some inspired burst of urban creativity emerging out of the municipal honeypot.

  3. Darren says:

    I’m all for infrastructure investment (especially as an urban Chicagoan), but what’s your take on the stance of people like Mark Rosentraub (at U of Michigan) who state that infrastructure investment is what will cause a net loss to cities that host the Olympics? Does the benefit from infrastructure investment offset what the European Tour Operators Association claims may be long-term damage to the host city’s tourism economy?

    In other words, is the benefit from infrastructure investment worth all the other costs associated with hosting the Olympics?

  4. Christopher says:

    The Olympics great a goal, and the put it within a brand. And if you’ve ever read any of the IDEO books about managing teams and leading for innovation — those things count. It might make more sense, economically and structurally, for Chicago and other cities to do a regional visioning plan. Call it Chicago2012 — set up goals, create a plan, give it a logo, etc. The problem is that it’s too abstract. There’s no consequence if they fail. An Olympics is a specific event with international media exposure, an international body to oversee it, and an inflexible date.

    You aren’t allowed to fudge it. And if you screw up, the whole world knows it.

    Nothing else is going to give you that motivation.

    Ask any visual artist, the best thing for producing, is to have a scheduled show. It’s a make or break deadline.

  5. Montreal paid off its 1976 Olympic debt in 2006.

    (http://www.cbc.ca/canada/montreal/story/2006/12/19/qc-olympicstadium.html)

    So yes, people in Chicago should perhaps question whether a city so intent on selling off all its assets (including that disaster of a parking deal) to pay off its current debts can actually afford a hefty 30 yr mortgage to finance the 2016 Olympic games.

    I know Chicago will put on a great show for the world; whether or not the city can afford it is another question altogether. Not sure about that one, given the current state of the city’s finances.