The Paris Olympic Games were considered a great success. But economist Andrew Zimbalist questions why cities seem so keen to host the events. Ian Taylor reports
Politicians’ desire for national and international attention and the importance of construction to city economies explain why destinations continually seek to host events such as the Olympic Games and World Cup, according to economist Andrew Zimbalist
A professor of economics at Smith College in the US and author of several books on the political economy of mega events, including Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup, Zimbalist is a long-time critic of such events.
Speaking on a webinar hosted by European travel association ETOA as the Paris Olympics drew to a close, Zimbalist told ETOA chief executive Tom Jenkins: “Politicians can be self-centred and interested in promoting their careers, and they get a lot of attention when they host the Olympic Games.
“They get attention nationally as well as internationally and get to hobnob with international leaders. But more often than not, these events are not beneficial economically.”
He added: “The construction industry is the largest employer in the urban political economy. Construction generates a lot of money and can finance a lot of politicians’ careers, so politicians tend to listen to the construction industry.”
Zimbalist argued: “Other factors can also push this, to do with corruption in certain countries.”
But he suggested “stepping away from the view that politicians do things because they care about the general wellbeing” of the countries and regions they represent “to a more cynical view that they do things to promote themselves, to promote their careers, to promote their political party” helps explain the hosting of these events.
He insisted: “The motivation in committing to these events is not about the welfare of the particular community or city.”
Asked if there are any benefits to hosting the Olympics, Zimbalist said: “It’s possible. If you’re going to spend $5 billion or $10 billion building infrastructure and public transport and modernising airports, clearly some of those investments will pay off.
“Whether they pay off as much as if you spent $10 billion on different infrastructure projects or, for example, on the local school system is another matter.”
He argued: “There can be some residual benefits. There is evidence that in the short term there is a rise in ‘the spirit’ of people, but that dissipates very rapidly.
“You sometimes see Olympic facilities used post-event, but they may be used in uneconomic ways and occupy valuable urban real estate that could be put to other uses
“You have to look at the broader picture. If you’re spending billions of dollars, is this the best way to generate benefits? Is it an efficient way to spend limited resources.”
Jenkins noted: “The one example of an Olympic Games’ host city which made a modest profit is Los Angeles in 1984.” He asked: “Is that the way to do it?”
Zimbalist agreed: “The 1984 Los Angeles Olympics did generate a very small profit.”
But he argued: “There were very special conditions in 1984. I suspect Los Angeles will generate a small surplus again [when it hosts the Olympics] in 2028. But there will be a security bill of around $2 billion and that will be picked up overwhelmingly by the Federal government. It will not affect the Los Angeles’ Games budget.”
Zimbalist added: “Highly qualified and motivated individuals work countless hours to make the Olympic Games happen, many devoting themselves for free.
“If they worked on other projects, the city would be better off. You have to ask, ‘Is it a wise investment?’.
“Los Angeles is already on the map. It doesn’t need the exposure. And remember, the exposure is not necessarily positive.
“The Paris Olympic Games began with an act of sabotage. In Mexico, [ahead of the Olympic Games] in 1968, hundreds of protesting students were killed. In Rio de Janeiro [ahead of the Olympics] in 2016, 77,000 people were evicted from their homes in favelas.”
Zimbalist noted: “The International Olympic Committee claims that the Games not only benefit tourism but also boost trade.”
He insisted: “There is no empirical basis for this at all. Corporations don’t invest in a city because it hosted the Olympic Games.
“I don’t think Qatar improved its image by hosting the World Cup two years ago. It spent over $200 billion building football stadiums using labour from poor Asian countries, using a system very similar to indentured servitude.
“Did it achieve a ‘sports wash’ by doing so? I don’t think so. A lot more information became available about the underside of Qatar society and politics.”
Zimbalist also drew attention to the extensive carbon footprint of events such as the Olympic Games, noting: “When the modern Games began in 1896 it was necessary to move the Games around.
“Now, why can’t we have the Games in one location and not have to rebuild an Olympic Shangri-la every four years with a huge CO2 footprint?”
He argued: “The International Olympic Committee is never going to agree to that, but corporations can begin to push in a different direction.”
The 2028 Olympic Games are due to be held in Los Angeles and the 2032 Games in Brisbane, with the Winter Olympics in between time based in Milan in 2026 and the French Alps in 2030.
The next World Cup will be the men’s competition in the US, Canada and Mexico in 2026.
The next women’s World Cup is due to be held in Brazil in 2027, and the men’s World Cup of 2030 in Spain, Portugal, Morocco and South America.