Who Wants the Olympics?

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.

This paper is skeptical of the Olympics. This paper sees a summer Olympics announcement giving a sharp short-term boost to stock prices. I take that as evidence that stock market participants are behaving irrationally, but if you think irrational capital market behavior is impossible then I guess that counts as evidence that hosting the games is beneficial.