Olymponomics

The Olympics are a great event. The Summer games draw more attention, and are a gigantic organisation. The Winter games are much smaller, are more cosy and in a certain sense... warmer. Speaking about temperatures, it is too hot in Vancouver, some 10 degrees above normal.

But we are more interested in the economics of the Olympics. Remember the Greek Olympic Games back in 2004, perhaps the start of the budgetary manipulation and derailment of the country. In 1997 when Athens "won" the games, city leaders and the International Olympic Committee estimated a cost of $1.3 billion. When the actual detailed planning was done, the price jumped to $5.3 billion. By the time the Games were over, Greece had spent some $14.2 billion, pushing the country's budget deficit to record levels.

The Chinese claimed the Games were profitable, but we all know the transparancy of Chinese economic figures.

And now there is Vancouver. A lot of focus is going to some technical mishaps, and of course the warm weather. But there is also an interesting discussion about the economic paybacks. And Vancouver seems to confirm that Olympics are not about a profitable investment. Reports are notably biased, as they are often made by the organising city, province or country. (The University of Iowas refers to a PWC study on the Vancouver Games , and other studies in preparation of the London games).

Some of my personal conclusions from past and present Olympic experiences :

* Olympics are above all about prestige, not about economics

* The economic return ex ante has always been overstated

* The economic return ex post has always been very unclear

* Olympics make sense from an economic point of view if you need an infrastructural boost, and - and only when - the infrastructure can be usefully reoriented after the Games.