Podcast | Deep Dive - Citius, Altius, Fortius…Pauperculus? The economics of Olympics

Citius, Altius, Fortius – Faster, Higher, Stronger – that is the motto of the Modern Olympics. Pierre de Coubertin proposed the motto, borrowing it from his friend Henri Didon, a Dominican priest. Coubertin said, “These three words represent a programme of moral beauty.

We have only recently seen the conclusion of the Pyeongchang Winter Olympics, and two years ago, the sporting carnival that was the Summer Olympics was held at Rio de Janeiro. The cheer that these Games bring is certainly a fact, but are the much-touted economic benefits a myth? Do Olympic host cities and nations experience a tourism growth that is faster, a GDP growth that is higher, and is the state of the overall economy of the country stronger at the end of the Games? That is the question we are asking today. We have spoken to you earlier about the economic benefits and troubles of hosting the football World Cup (only a few days away now); and earlier we have spoken about the monies of the annual IPL. Today, we are going to turn our attention to the economics of mankind’s greatest celebration of sport – the Olympics and you’re listening to Moneycontrol.

SOUTH KOREA AND THE OLYMPICS LEVERAGE

Few things inspire a country’s patriotic spirit like the hosting of a major global sporting event like the World Cup or the Olympics. With the cost of hosting these events well above a billion dollars in the modern era, these are essentially ‘Megaprojects.’ To prepare for these mammoth events, host countries end up spending billions to modernise infrastructure, build stadiums, increase commerce, and promote tourism. To the casual observer, such activity might seem fertile ground for economic expansion and strong investment performance, but in reality how well do these mega sporting events drive growth in a host nation’s economy or equity market? The 23rd edition of the Winter Olympics dubbed the ‘Peace Olympics,’ held in Pyeongchang, is still fresh in our memory. So now is as good time as any to ask the all important question – do the Olympics drive economic growth in host countries, and if so, by how much? Historically, the simple answer is – “No, they do not.” But the more cryptic answer is a “Well… yes and no.”

To understand the economics of the Olympic Games and to read between the pros and cons of the greatest sporting extravaganza of humankind is the primary motive behind this edition of the deep dive.

First, let's start with the latest venue – the host of the 23rd Winter Olympics, South Korea. South Korea’s first time as an Olympic host was for the 1988 Summer Games in Seoul which marked a historic turn that widened the scope of its diplomacy with Eastern Bloc countries, facilitated South Korea’s democratic transition, and exhibited to the world the accomplishments of a rapidly developing nation. Three decades later, the hope was much the same – South Korea hoped that hosting the 2018 Winter Olympics in the city of Pyeongchang would generate equivalent diplomatic, political, economic and image-enhancing benefits, especially in contrast to their brothers in the north, North Korea.

In 1988, South Korea was the 18th largest economy in the world. For one of the world's newest democracies and an Asian developmental success story, the Seoul Olympics were a coming out party, signifying South Korea’s entry into the developed world. Today, South Korea is an industrialized economy that ranked 11th in the world in 2016, and the Olympics are an affirmation of the country’s global leadership; an opportunity for it to push for peace on the Korean Peninsula; and promote its soft power via movies, pop songs, and other cultural contributions, not to mention its strong industry.

Echoing its message at the 1988 Seoul Olympics, South Korea once again argued that hosting a ‘Peace Olympics’ would harness the Games’s spirit to overcome rising inter-Korean tensions. Although such prospects seemed to diminish in the face of rising US-North Korea nuclear tensions throughout 2017, North Korean leader Kim Jong Un extended an offer in his New Year’s address to reduce tensions with South Korea in exchange for an invitation to North Korea to participate in the Olympics. South Korean President Moon Jae-In eagerly accepted Kim Jong Un’s offer to resume dialogue which Moon had been calling for since June. The Moon administration quickly agreed to North Korean athletes entering the Games’ Opening Ceremony under the unified Korea flag, and to host North Koreans including musicians, athletes, officials, cheerleaders, and a Taekwondo team in Olympics-related festivities.  Subsequent negotiations between the IOC (International Olympic Committee) and representatives from the two Koreas paved the way for 22 North Korean athletes to join skiing and skating events, as well as for a united Korean team in the Olympics – players from the North and South competed together in women's hockey.

The role of the Olympics in easing North-South tensions can hardly be overstated – Kim Jong Un and Moon Jai-In did have talks a few months after the conclusion of the Games. The Games may not have cured all or any problems between the two countries, but they certainly made room for some conversation between them. Any escalation of tensions between the countries affects the geopolitical climate globally, as also global markets. Let’s not forget that North Korea is nuclear-capable, isolated, and by all accounts, under the leadership of a man who fashions himself as being disruptive.

A common thread for both Korean Olympic Games is the South Korean government’s emphasis on infrastructure development, and that is what we're going to concentrate on, on this deep dive. The Olympic Village in Seoul, a part of the city’s southward expansion, was accompanied by significant upgrades to public transportation and infrastructure, including new athletic facilities and public parks. Likewise the Pyeongchang Olympics created an opportunity to build out national transportation and sports infrastructure in the Gangwon province in northeast South Korea with high speed rail links and new winter sporting facilities that Koreans hope will attract visitors from across Asia. South Korea relies less than most countries on tourism, which makes up only 1.8% of its GDP.

How did the Olympics back in 1988 impact South Korean industry? In 1988 the Seoul Games put South Korea on the map for many global viewers, and provided an extended brand awareness of South Korean conglomerates to new global markets. The Seoul Olympics coincided with companies such as Hyundai, Samsung, and Lucky Goldstar (LG) pushing their automobiles, electronics, and household goods into new markets on every continent. In 2018 it is South Korea’s advanced technology and cultural products – cutting edge cell phones and apps, television dramas, movies, and pop culture icons – that officials have hoped will benefit most from South Korea’s return to the spotlight. The South Korean hope before taking on the Olympic mantle once again was that the marketing of Korean culture overtakes reporting on security risks.

If the 1988 Seoul Olympics were a “coming out” party for the country, South Korea’s hope this time around were for it to be perceived as a mature and modern leader, able to host the world with confidence and good grace. The Olympics provided a unique but possibly fleeting instrument to try to bridge the gap between North and South Korea. The irony was that no matter its pride and capacity, South Korea’s success ultimately depended on co-operation by the North. To that extent, the Peace Olympics achieved what it had set out to do. The Pyeonghchang Winter Olympics were a largely peaceful, co-operative affair. Were the economic aims and objectives laid down achieved? It’s still too early to tell. But stick around, we will tell you all about Rio, the first South American venue of the Olympic Games.

THE COSTS OF HOSTING THE OLYMPICS – TROUBLES AND OVERRUNS

Considering there are quite as many zeroes within the logo of the Olympics, perhaps it stands to reason that the hosting of the Olympics also involves a lot of zeroes. The Olympics have of course evolved dramatically since the first modern games were held in 1896. In the second half of the 20^th century, both the costs of hosting and the revenue produced by the spectacle grew rapidly, sparking controversy over the burdens host countries shouldered. A growing number of economists argued that both the short and long-term benefits are at best, exaggerated, and at worst, non-existent, leaving many host countries with large debts and maintenance liabilities. Instead, many argue, Olympic Committees should reform the bidding and selection process to incentivize realistic budget planning, increase transparency, and promote sustainable investments that serve the public interest. But more on that later.

Rio de Janeiro’s 2016 Games highlighted the ongoing debate over the costs and benefits of hosting such a mega event. Close to two years later, the city is still struggling with debt incurred, maintenance costs for abandoned facilities, underequipped public services, and rising crime, even as candidate cities for future Games withdraw their bids or scale down their plans.

This is unfortunately not a new story. Interest in the cost of the games has been high since the establishment of the Modern Olympics in 1896. As long ago as1911, Baron Pierre de Coubertin, the man responsible for establishing the Modern Games, referred to “the often exaggerated expenses incurred for the most recent Olympiads.” Jean Drapeau, the mayor of Montreal, famously stated “The Montreal Olympics can no more have a deficit than a man can have a baby”. Famous last words because the Montreal Olympics are famous for having run over the estimated cost by well over nine and a half times.

Despite substantial interest in the costs of the Games, however, attempts to specifically and systematically evaluate the costs and cost overruns of the Games are very few, and even while those that do attempt them, are often focused on a specific edition of the Games. Previous research on the costs of the Olympics has instead focused on whether the Games present a financially viable investment from a cost-benefit analysis perspective. But, what to measure when determining the costs and benefits of the Games to a host country are often up for debate. In particular, legacy benefits described in the bid are often intangible, and as such pose a difficulty in ex post evaluations. The benefits to increased tourism revenue, jobs created by Olympic needs, or National pride are hugely varied and quite difficult to quantify. Now I cannot possibly quantify the pride the South Koreans feel at having hosted a successful Olympic games. There isn't a number that tells me that.

Costs are equally hard to determine. For example, one could argue that if hotels in the city have invested in renovations in view of the Olympics, and benefits of increased tourist revenues to those hotels are included in the analysis, then these costs should also be included in any accounting. But they are not. Similarly the percentage of work that an employee in an outlying city spends on Games-related work would be exceptionally difficult to estimate. So there are already troubles in trying to understand what the costs of the Olympics in general are.

What we must also bear in mind here are two things. I already described how the Modern Olympics are  mega projects, meaning they involve expenditure of more than a billion dollars, but what has stood out about the Olympics in comparison to any other mega projects are two. One, the Games overrun with 100% consistency. No other type of mega project is this consistent regarding cost overrun. Other types of projects are typically on budget from time to time but never the Olympics. Every single modern Olympics has overshot its budget. And number two, with an average cost overrun, in real terms of 179% (and 324% in nominal terms) overruns in the Games have historically been significantly larger than for other types of mega projects, including infrastructure, construction, ICT, dam projects. The data therefore show that for a city and nation to decide to host the Olympic Games is essentially to take on one of the most financially risky types of mega projects that exist, something that many cities and nations have learnt to their peril.

All of these issues that I spoke about have led to many economists asking for a complete revision of the bidding process itself. The competition for hosting the Olympic Games has become a hotly debated political arena in which cities pitch their ideas for urban development against each other to win the opportunity to host the world’s biggest sporting event. Cities prepare something called the Bid Book, or formally called the Candidature Files. In these books, cities detail their abilities and plans to pull off the world's biggest sporting event that is the Olympics, and one of the major requirements to be inserted into this book is budgets that form the basis of the expected investment by the host country and city’s governments in addition to funds generated as revenue. In the bid book, the governments of candidate countries also required by the IOC to provide guarantees to ensure the financing of all major capital infrastructure investments required to deliver the Olympic Games and cover a potential economics shortfall of the OCOG, which is the Organising Committee.

The bid book is a legally binding agreement and as such represents the baseline from which future costs and cost overruns should be measured. However, this is rarely ever done. New budgets are developed after the bid has been awarded to the city and these new budgets are often substantially different to those presented at the bidding stages. These new budgets are often used as new baselines rendering measurement of cost overrun inconsistent and factually misleading. New budgets continue to evolve and develop over the course of planning for the Games until the final actual costs are presented, often several years after the Games’ completion, if at all they are presented.

Here, it's good to remember what happened at the Sochi Winter Olympics. It was originally budgeted at 12 billion dollars, but eventually ended up costing 51 billion dollars – more than three times times the cost of the Summer Olympics in London. The costs surpassed even the 2008 Summer Olympics at Beijing, one of the most expensive Summer Olympics. Also, remember that the Summer Olympics are a more expensive event than the Winter Olympics, and the Sochi Winter Olympics ended up costing much more that the most expensive Summer Olympics. When did costing become such a problem in the Olympics? That’s what we will find out next.

WHEN DID THE OLYMPICS BECOME SO EXPENSIVE TO HOST?

For much of the 20th century, the staging of the Olympic Games was a manageable burden for the host cities. The events were held in developed countries either in Europe or United States, and in the era before television broadcasting, hosts didn't expect to make a profit. Instead, the games were publicly funded with these advanced countries better positioned to bear the costs due to their larger economies and more often than not, already-in-place infrastructure.

The 1970s marked a turning point.

Here, we have to acknowledge the work of Andrew Zimbalist, who is a professor of Economics at Smith University and the author of the book ‘Circus Maximus: the Economic Gamble behind Hosting the Olympics and the World Cup.’

In the 70s the Games were growing rapidly with the number of Summer Olympics participants almost doubling, and the number of events increasing by a third during the 60s. Every Olympics since 1960 has seen major cost overruns. The killing of protesters in the days before the 1968 Mexico City Games and the fatal assault on Israeli athletes at the 1972 Munich Games tarnished the image of hosting the Olympics, and public skepticism of taking on debt to host the Games grew. In 1972, Denver became the first and only chosen host city to reject its Olympics, after voters passed a referendum refusing additional public spending for the Games. And Denver has remained an exception.

The 1976 Summer Olympics in Montreal came to symbolise the fiscal risk of hosting the Games. The projected cost of 124 million dollars was billions below the actual cost, largely due to construction delays and cost overruns for a new stadium, saddling the city’s taxpayers with some one and half billion dollars in debt that took nearly three decades to pay off.

As a result, in 1979, Los Angeles was the only city to bid for the 1984 Summer Olympics, allowing it to negotiate exceptionally favourable terms with the IOC. Most importantly, LA was able to rely almost entirely on existing stadiums and other infrastructure, rather than promise new facilities to entice the IOC selection committee. Of course, it was not like the IOC had much to choose from considering LA was the only city that bid.

What also happened during this time was a sharp jump in television broadcast revenue, and this made LA the only city to turn a profit hosting the Olympics, finishing with a surplus of 215 million dollars. For comparison, let’s take a look at broadcast revenue from Olympics television rights fees between 1980 that is Moscow Olympics, where it was just 88 million dollars and Los Angeles, where the fees jumped to 286.9 million dollars. The London broadcast revenue from Olympics television rights fees was 2600 million dollars!

LA’s success led to a rising number of cities bidding – from two for the 1988 Games to twelve for the 2004 Games! This allowed the IOC to choose the cities with the most ambitious and often the most expensive plans. In addition, bidding by developing countries more than tripled after 1988. Countries such as China, Russia, and Brazil have been eager to use the Games to demonstrate their progress on the world stage. Let’s remember that the Olympics are not simply about sport; they are also about the host country presenting itself as having arrived on the world stage. We have seen that in the Korea story. However, these countries invested massive sums to create the necessary infrastructure. Costs spiraled to over 45 billion dollars for the 2008 Beijing Games; the Winter games in Sochi in 2014 cost a whopping 51 billion dollars; it was a cheque for 20 billion dollars for the Rio de Janeiro Games in 2016; and the latest 2018 Pyeongchang Games gave a bill of 13 billion dollars, almost twice as much as the planned 7 billion dollars.

These severe cost overruns have led to renewed scepticism all over again, and a number of cities have withdrawn their bids for the  2022, 2024, and 2028 Games over cost concerns. Oslo and Stockholm both backed out of their 2022 bids upon realizing that costs would be higher than originally estimated. Boston withdrew from consideration for the 2024 Games with its mayor saying that he refused to mortgage the future of the city away. The 2024 finalists – Budapest, Hamburg, and Rome – also withdrew leaving only Los Angeles and Paris in the fray. In an unprecedented move, given the lack of candidates, the IOC chose the 2024 and 2028 venues simultaneously in 2017, with Paris hosting in 2024 and Los Angeles in 2028.

THE OLYMPICS AND GDP

Some of the cities that backed out eventually, quite possibly did so after looking at a few graphs. Just to give you an estimate about how GDP was affected after the hosting of the Olympics, take a look at South Korea in 1988. GDP growth two quarters before the Olympics was hovering near 16%, and GDP growth two quarters after the Olympics was nearly at 4%. That's a difference of 12% in GDP growth all because of the hosting of the Olympics!

The Barcelona Olympics in 1992 left the central Spanish government four billion dollars in debt, and the city and provincial governments an additional 2.1 billion dollars in debt.

The Nagano Winter Olympics in 1998 is a whole other story because will never know the story! The full cost of the Nagano Olympics will never be known because the documents accounting for money spent on the Olympic bid were burnt, on the orders of the Nagano Olympic Committee’s Vice Secretary General. Yet it is clear that it went vastly over–budget and pushed Nagano into recession.

Athens is probably the biggest cautionary tale. The Athens Olympics of 2004 vastly exceeded its 4.6 billion dollar budget. Many believe the real accrued debt of roughly 15 billion dollars contributed greatly to Greece’s financial crisis, which continues to this day.

HOW MUCH IS SPENT FROM BIDDING TO HOSTING?

Cities must first invest millions of dollars in evaluating, preparing, and submitting a bid to the IOC. The cost of planning, hiring consultants, organising events, and the necessary travel consistently falls between 50 and 100 million dollars, and this is even before the bid has been approved. Tokyo, for example, spent as much as 150 million dollars on its failed 2016 bid and about half that much for its successful 2020 bid. So essentially, for these two bids put together, it was by 225 million dollars – not even the beginning of the expenses! Toronto decided it couldn’t even afford the 60 million dollars it would have needed for a 2020 bid, and therefore backed out.

Once a city is chosen to host, it has nearly a decade to prepare for the influx of athletes and tourists. The Summer Games are obviously far larger attracting hundreds of thousands of foreign tourists to watch over ten thousand athletes compete in over 300 events, compared to about 3000 athletes competing in about a hundred events at the Winter Games. This is why Sochi is an example of exceptional cost mismanagement. For a Games a third the size of the Summer Games, Sochi ended up being the most expensive installment in Olympics history.

The most immediate need after the city is chosen is the creation or upgrading of highly specialised sports facilities like cycling tracks, ski-jumping arenas, the Olympic village, and a venue large enough to host the opening and closing ceremonies. There is also usually the need for far more general infrastructure especially housing and transportation. The IOC requires the city hosting the Summer Games to have a minimum of 40000 available hotel rooms, which in Rio’s case necessitated the construction of 15000 new hotel rooms. Roads, train lines, and airports need to be upgraded or constructed. For example, in Rio, 3 billion dollars were spent for a rail line connecting the city to the venue of the Olympics – now largely unused and not serving a larger purpose.

Altogether these infrastructure costs range from 5 billion to over 50 billion dollars. Many countries justify such expenditures in the hopes that the spending will outlive the Olympic Games. For example, some 85% of the Sochi 2014 Games more than 50 billion dollar budget went into building non-sports infrastructure from scratch. Let’s also remember that they had to import snow. For the Winter Games! More than half of the Beijing 2008 budget of 45 billion dollars went to rail, roads, and airports, while nearly a fourth went into environmental cleanup efforts. 450 million dollars, for example, were spent in building the Bird’s Nest, the stadium that hosted the opening and closing ceremonies. It costs Beijing 11 million dollars annually for its upkeep and is not always utilized. In another case, the stadium that was built in Sydney for the Sydney Olympics is now going to be broken down and constructed again. And we have all seen photographs of many venues built for Beijing Olympics and the Rio Olympics which have now gone into disrepair, and are essentially sites of vandalism as they sit unused or underutilised. Pyeongchang, South Korea, built a brand new Olympic stadium to host the Winter Games this year. The 35,000-seat stadium cost $109 million to build. And it would have been used just four times before it is demolished.

The cost of the stadium will come out to an astonishing $10 million per hour of use, according to Judith Grant-Long, a scholar of sports at the University of Michigan.

The reason Pyeongchang plans to destroy the arena is pretty straightforward: The County it’s situated in has about 40,000 people; in order to fill the stadium after the Olympics and the Paralympics are over, almost every single person living in the area would have to attend an event there simultaneously to fill it up. The stadium will soon be useless for locals.

Operational costs make up a smaller but still significant chunk of the host’s Olympics budget. Security costs have escalated quickly since the 9/11 attacks. Sydney spent 215 million dollars in 2000, and Athens spent over 1.5 billion dollars in 2004! And costs have remained between 1 and 2 billion dollars since.

Also problematic are the so called “white elephants” or expensive facilities that because of their size or specialised nature have limited post-Olympics use. The stadium in Sydney, the stadium in Pyeongchang, almost all of the facilities built for the 2004 Athens Olympics whose costs contributed to the Greek debt crisis sit unused. The Gangwon province in South Korea where Pyeongchang is, expects to spend about 8.5 million dollars annually for the upkeep of the unused venues built for the Games.

Economists say the Games’s so called “implicit costs” must also be considered. These include the opportunity costs of public spending that could have been spent on other priorities. Servicing the debt that is left over after hosting the Games can burden public budgets for decades. It took Montreal until 2006 to pay off the last of its debt from the infamous 1976 Games and Greece’s billions in Olympics debt helped bankrupt the country – a bankruptcy it has still not emerged from. The debt and maintenance costs of the Sochi 2014 Winter Games will cost Russian taxpayers nearly a billion dollars per year for the foreseeable future, experts have estimated. And there are worries that the solvency of some major Russian banks is threatened by billions of dollars in bad Olympics-related loans.

While some in Sochi see the unused and other overbuilt facilities as a waste, other residence argue that the Games spurred spending on roads, water systems, and other public goods, that wouldn't have otherwise happened. So, like I said earlier, we have to weigh pros and cons. Do the cons appear bigger? Almost certainly. But are there pros? That is a definite yes too. Let’s consider some of them.

(SOME) PROS AND (MANY) CONS OF HOSTING THE OLYMPICS

The 1984 Olympics in Los Angeles were the only Games to produce a surplus. Of 215 million dollars. This was in large part because the city was able to rely on already existing infrastructure and they didn't have to build new stadiums or any of those ‘white elephants’ that we discussed. As the costs of hosting have skyrocketed, revenues cover only a fraction of expenditures. Beijing’s 2008 Summer Olympics generated 3.6 billion dollars in revenue, and that’s a huge number, but compare that with the cost of 40 billion dollars, and you know the difference. London’s 2012 Games generated 5.2 billion dollars in revenue, but the costs were 18 billion dollars! Not exactly a fair bargain. What’s more – much of the revenue does not go to the host. The IOC keeps more than half of all television revenue, typically the single largest chunk of money generated by the Games. Take for example 2009-2012, 8.05 billion dollars were generated in revenue, and of that, 3850 million dollars came from television revenues, and more than half of that was kept by the IOC.

Impact studies carried out or commissioned by host governments before the Games often argue that hosting the event will provide a major economic lift by creating jobs, drawing tourists, and boosting overall economic output. But research carried out after the Games shows that these purported benefits are dubious.

It's time to bust a couple of myths.

MYTH 1 – JOB CREATION:

In the 2002 Salt Lake City Winter Games, a study found a short term boost of 7000 additional jobs, but was it as much as the number that was promised? Well, no. 70000 jobs were promised by officials, and here we did not also see any long term increase in employment. As a study by the European Bank for Reconstruction and Development explained, the jobs created by Olympics construction are often temporary, and unless the host region is suffering from high unemployment, the jobs mostly go to workers who are already employed, blunting the impact on the broader economy. Another example – only 10% of the 48000 jobs that were created during the London Olympics went to previously unemployed people, and that's just 4800 jobs out of the 48000 that were created during the 2012 Olympics.

MYTH 2 – BOOST TO TOURISM:

Another explanation that hosting countries offer is that tourism will get a major boost. This is mostly a myth. Economists have found that the impact on tourism is mixed as the security, crowding, and higher prices that the Olympics bring, dissuade many visitors. Barcelona, for example, which hosted in 1992, is cited as a tourism success story, and it is true, it rose from the 11th to the 6th most popular destination in Europe after the Summer Games there. And it is also true of places like Sydney and Vancouver which both saw slight increases in tourism after they hosted.

But in many other cities, that has not been the case. London, Beijing, and Salt Lake City all saw decreases in tourism the years of their Olympics. As somebody who was in England during the Olympics, I can vouch for the fact that many people avoided going to London citing the overcrowding in the city by tourists. Sure, Londoners certainly enjoyed the Olympics, but did they also crib nonstop about the overcrowding and the traffic? Most certainly, guv’nor.

Ultimately, there is little evidence of overall positive economic impact. Boston’s National Bureau of Economic Research has published findings that hosting has a positive impact on a country's international trade, but some other economists found no long term impact of hosting on a country’s Gross Domestic Product. And in fact, as we saw earlier, there has been a decrease in the GDP growth rate once the hosting has taken place.

So are there pros? Absolutely. Do they outweigh the cons? Absolutely not. Yes, the country gets visibility; yes, the hosting city gets visibility; yes, the culture of the hosting country gets exported to places where they may have hitherto not had an opportunity to go to, and agreed, one cannot quantify these intangible aspects in pure economic terms, but even a cursory look at the tangible aspects of the Games make it an unwieldy exercise.

HOW CAN THE OLYMPICS BE MADE MORE MANAGEABLE?

Let’s finally talk about solutions.

Consensus has grown among economists that the Olympic Games need reform for them to be made more affordable and more economically viable. Many have pointed out that the IOC bidding process encourages wasteful spending by favouring potential hosts who present the most ambitious plans for the Games. And these plans more often than not will neither go to fruition nor do they get made within the given budget. We have found out that they always overrun and more often than not lead the country and the city to great economic crisis. This so-called winner's curse means that over-inflated bids, often pushed by construction and hospitality interests consistently overshoot the actual value of the hosting. Andrew Zimbalist in his book goes on to say that the bidding process is at the behest of construction and hospitality interests rather than the local governments, which is not a hard guess to make, considering they stand to gain most during the Olympics preparation stages.

The other big problem is corruption. Corruption has dogged the IOC selection process – bribery scandals marred the 1998 Nagano Olympics and the 2002 Salt Lake City Games. As we found out earlier, Nagano’s bid papers were ordered to be burnt by the Organising Committee’s Vice Secretary General. As recently as 2017, the head of Rio’s Organising Committee was charged with corruption for allegedly making payments to secure the Brazil games. Allegations of illegal payments surfaced in the 2022 Tokyo selection as well. As we already know, 225 million dollars was spent by Tokyo in their 2016 and 2020 bids, and the final securing of the 2020 bid was not without raising doubts of dubious circumstances. Every vested interest clearly wants a piece of the rich, succulent, cashgiving Olympics pie.

In response to these corruption allegations, the IOC president Thomas Bach has promoted reforms to the process known as the Olympic Agenda 2020. These recommendations include reducing the cost of bidding, allowing hosts more flexibility in using already existing sports facilities, encouraging bidders to develop a sustainability strategy, and increasing outside auditing and other transparency measures.

Are these enough? Well, no. Some people do think more drastic measures are necessary. Economists Baumann and Matheson argue that developing countries should be spared the burden of hosting altogether, and the IOC should instead award the Games to rich countries that are better able to absorb more of the costs.

Andrew Zimbalist, whose book I wholeheartedly recommend, goes on to say that one city should be made the permanent host allowing reuse of expensive infrastructure. Barring that, he argues that any City planning to host should ensure that the games fit into a broader strategy to promote development that will outlive the Olympics.

In fact, the single permanent host idea was also favoured by Christine Lagarde, Head of the International Monetary Fund, who said she would prefer having Athens as the permanent host of the Summer Olympics. The logic is mostly sound - why not build the required 35 sports venues, the Olympic village, and the Broadcasting and Media Centre only once instead of building them anew every four years in a different city.

There are three problems with this symbolically soothing suggestion:

1, what is Athens going to do with the venues for the other 3 years and 348 days?

2, aren't there better uses for thousands of acres of scarce real estate?

3, where is Athens to find the two billion dollars that it would require every four years for Olympics security purposes?

Let's not forget that Athens is in Greece, and Greece is in a debt crisis.

Zimbalist goes on to say there is a better idea – why not make Los Angeles the permanent host? It has all the venues, the needed infrastructure, and the hotels. There is no US or LA chauvinism in his modest plan. He does not believe that LA would benefit but he also believes it wouldn't lose. The losers would be the US citizens and taxpayers who would have to put the two million dollar security bill every 4 years. And can they afford it? Well, how's the feeling that they can.

Research has comprehensively shown that a fourth comparative adjective needs to be added to the Citius, Altius, Fortius. Perhaps Pauperculus – poorer. While the Olympics bring riches beyond one’s imagination – physical feats that are too unhuman to understand; an otherworldly resilience, and a truly humanising celebration of the human spirit – it is without question also a process that needs more harnessing. It is a wild horse at this stage which needs to be braided down, and made dressage-worthy: disciplined, within the line, and cooperating with the jockey that is the host nation.