Summary - Currently, the 2018 winter Olympics are being held in Pyeongchang, South Korea, and while the Olympic games have been going great so far, there is still a cost to having them. The projected price tag for this years winter games is set at around $13 billion. The high cost from countries in order to build and support the Olympics is seen to some as a waste of money, they argue that this money could be spent in a more important area of the country. Country officials who bid to host the Olympic games argue that the increased tourism spending, better infrastructure, and higher global status/power all outweigh the cost of the Olympic games. The controversy stands around the idea of having both the summer and winter Olympics in different locations every time they happen.
Analysis/Opinion - I believe that the Olympics should be held in places where there economy would benefit from the Olympics. For example, in the U.S., we already have pre-made infrastructure for the Olympics, so our budget would be substantially lower than one of a country with no previous infrastructure already built. I think that Brazil should not have hosted the Olympics in 2016 because they had no pre-made infrastructure, and since their economic status is not too great, it would have been better if the country decided to focus their budget more on the necessities for their country rather than the Olympics.
Questions -
What economic principle do you think applies to hosting the Olympics?
Do you believe that the Olympics should only be held in more developed countries?
Link -
http://cornellsun.com/2018/02/19/of-marginal-interest-an-olympian-feat-the-economics-of-hosting-the-games/
6 comments:
Since individual cities make bids for the Olympics, the cost may be overwhelming. Recent Olympic game costs range in the tens of billions of US Dollars, which go towards not only the arena but also lodging, services, transportation for the athletes, lodging and logistics for the viewers, security, etc. And the price only seems to be rising from year to year. Even worse, there is a cos to the games long after they are over. Old stadiums require more money to dismantle, and if they are kept up, take up valuable land and upkeep fees. And the revenue generated from the games are decreasing. As less people visit and more people choose to watch through broadcast, the revenue brought in by the city is far from even breaking even with the costs. Economically, it makes no sense for a city to host the games. Perhaps that's why there were only 2 cities bidding for the most recent 2022 (or 2020 I can't remember) location decision.
I disagree with your point that the Olympics should be held in places where there is already infrastructure built. How often do you ever see a place where literally everything needed for the Olympics is built? I am not really sure about the winter games, but for the summer games, you would need a lot of different buildings/structures. Yes, currently, many countries have all the infrastructure needed because they have been previously built FOR THE OLYMPICS. Basically, eventually the Olympics would just be hosted in the same, however many, countries. Also, I really don't think that underdeveloped countries that hosted the Olympics (aka Brazil as you mentioned) would have used the money to "develop their own country" rather than build the stadiums and whatnot. The Olympics are a good way to increase the tourism for that country, even if people don't necessarily travel to watch the Olympics.
I think the Olympics go above and beyond economics. Although it might be completely unreasonable and make no economic sense for a city to host the Olympics, it is a point of pride. It is a huge international privilege to host the largest international show of cooperation and camaraderie. Simply hosting a successful Olympic games can raise a country's international standing or reputation. I agree, however, that the cost of hosting an Olympic games can be huge, but I think the costs are some what inevitable. The games are always a show of extravagance, usually the home nation chooses to show off, displaying their culture and country.
I think there is a balance between the economic side of the Olympic games and the political side of the Olympic games - it really depends on how exactly a country executes. For example, China used the 2008 Olympics as a chance to showcase themselves as a new world superpower - they had a strong political motive for hosting the Olympics. Brazil kind of intended to do the same but unfortunately they overshot economically. As the others said above, the Olympics shouldn't just be held in the same place every year, with the same infrastructure - that would defeat the purpose of the games since the Olympics are supposed to be global, not specific to one country or even one group of countries (i.e. highly developed western countries). I think as more and more countries become fully developed, the Olympic games are going to be an important "rite of passage" to show their new political and economic (possibly even cultural) importance in the world.
I think Meiling's point of the Olympics becoming a "rite of passage" for developing countries is interesting when you consider it's importance in economics. The 2020 summer Olympics will be held in Tokyo, Japan, an undeniably prosperous city. I think it is important to consider the economic stability of host nations; Japan's economy will likely survive hosting the Olympics. For less developed nations, I think, theoretically, the increase in jobs and investment from new infrastructure and the revenue from tourism could stimulate the national economy and further its development. Ideally, the nations that aren't as economically developed but are stable enough to support hosting the Olympics may benefit the most. But we know that, in reality, that is very rarely the case.
I think the social and political aspects of the games are very important. As Meiling mentioned countries use the Olympics to show of their countries strength. However, since it is so expensive and may hurt less developed country's economy I do think that more developed countries should host instead. If a country did want to host the Olympics but was struggling to pay maybe there could be some way to get other countries to help with the costs somehow but that is very unlikely because they would not get the benefits of tourism and infrastructure.
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