I think there's an important psychological dimension that's often missed from these calculations, particularly for countries that have a chip on their shoulder. It's a way for the entire world to be focused on something that you're doing well (hopefully) for a few weeks. Before the Beijing olympics many Chinese would ask you how you liked China, and when you replied, "yes" they would say China is "luo hou", which means backward. China is still luo hou to most who don't live in the richest eastern seaboard cities, and being able to watch China do something amazing for weeks on end is more than worth the 40 billion that was spent.<p>Lets not forget that in developing countries, massive investments are often sped up just to get the opportunity to bid - in 1999, the Beijing subway was almost nonexistent. Today it's one of the largest systems in the world, and was largely constructed prior to the Olympics. Other improvements included the Beijing airport. Of course, you could say that I'm cherry picking the Chinese olympics as one of the few examples, and maybe there aren't many advantages for a city like Tokyo or London, but even here in the UK, many people were inspired and proud of how their country handled the events. That may not be worth what it cost, but it is worth something, and I think it's a bit bizarre that the Economist seems to be puzzled as to why these events poll well with voters.
Current politics seems to demand that everything be an investment. Education, roads, stadiums. It is supposed to create growth. Stimulate. Save on future healthcare or welfare costs. etc.<p>Realistically, the way to think about almost all government spending is consumption. By spending on health we (hopefully) get to be healthier. By spending on entertainment we are more entertained. The Olympics or any other public prestige projects are like when billionaires and dictators do stuff, but for cities and nations. They get to feel prestigious. Prestige might have some economic benefits but thinking of it that way misses the point. Prestige is an end in itself.
Same reason you'd host any sort of expensive party. To look cool and feel cool. A lot of international politics make a lot more sense when you remember we're all in high school.
Only an economist could ask a question of the form "why would anyone want to do <activity without clear economic benefit>?"<p>I wonder how they manage to reproduce.
First prestige and second corruption opportunities.<p>Basically its like a high school party for cool kids, with an added bonus that some of the cool kids get a lot of money at the expense of others.
If I were a mayor, hosting the olympics would seem like a good way to shove infrastructure improvements past all the NIMBY assholes that always block them.
politicians love big money moving around so they can grab a bit for themselves.
Many big projects in Italy shows this seems to be the main, if not unique, drive for events like the Olympics.
Interesting that it got published just now(8th). Oslo,Norway just voted yes to ask the government for financial guarantee in order to try to get the Vinter Olympics in 2022.
Also for Turkey, It means government gets an excuse for building landmarks to north Istanbul. Expanding city and continue benefiting from a never-ending real estate gold rush in Istanbul. Both bidding of big projects and real estate benefits will go to "friends" of government.<p>Also they will use this excuse for removing poor people, and destroying houses that have much higher real estate value than their residents.
If you have most of the infrastructure already, like Sydney, it makes sense.<p>Whereas Montreal is still paying debts from hosting the Olympics in 1976.
Istanbul would be a perfect place for an Olympics, except Erdogan ruined it for them. Did you know that Istanbul is already third most internationally traveled city?
On top of my head: not all is lost. So if it costs $50 Billion, a lot of it is recouped via jobs, taxes, infrastructure that would have been built anyway, tourism etc. Some is lost but that's life. There's the "Made in Japan ...USA, China" brand and other geopolitical benefits as well. So money might be lost or it will be lost but so what? Greece has no business in doing them but Japan, China, USA, Russia and countries alike can afford to lose a (relatively) little bit of money for indirect benefits. Sometimes people buy a Lexus when a Toyota does the job just as well, or eat a $100 per head restaurant instead of a $7 Chinese buffet. Are they dumb?<p>Politicians also win, there's euphoria in Japan right now and those involved will see some benefits, just as those been seen during the opening ceremony, medals etc.