The Olympic Games is an event of such magnitude that it can potentially have a significant economic impact on the host city and, for the smaller countries, on the host nation as a whole. While the actual event may last for only a few weeks, preparations commence up to a decade beforehand and may entail considerable investment expenditures that can have longer term economic significance.
It is important to draw a distinction between the financial impact of hosting the Olympics and the wider economic impact of the Games. The financial impact of the Games relates specifically to the budgetary balance of the host city’s organising committee, and whether the financial costs of hosting the Games can be met by the revenues directly generated from Games events. The economic impact, on the other hand, relates to the wider effects of the Games on the general economy arising from associated factors such as increased tourism and improved infrastructure. In general, we focus in this article on the overall economic impact, although in some cases we also refer to estimates of the financial performance of the Games itself.
Clearly, for large economies such as the United States, the economic impact of hosting the Games is likely to be significant primarily at the local or regional level, rather than at the macroeconomic level. But for a smaller economy such as Greece, these effects are likely to be felt also at the national level. The full economic impact of the Olympic Games on a host city is spread over time, and can broadly be split into three phases:
Impacts first start to occur soon after the city has decided to bid for the Games, up to a decade prior to the actual event, but become more significant after the Games is awarded. The impacts here......
