September 16, 2019
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Mitigating Negative Impacts on Host Cities

International Olympic Committee

Topic: Mitigating Negative Impacts on Host Cities

Cities often spend millions of dollars evaluating, preparing, and submitting bids to the International Olympic Committee (“IOC”) in pursuit of being chosen as the host of an Olympic games. If a city is selected, the costs only increase. Many host cities are required to make significant investments in their infrastructure in order to accommodate the influx of athletes and spectators, including construction of new hotels and upgrading roads, train lines and airports. The strict timeline for completion of any necessary construction almost always results in projects going over budget, and some Olympic events, like sliding sports, may require the construction of unique facilities that have limited uses after the games have ended. Each of the past five Summer Olympics and both of the most recent Winter Olympics have resulted in total costs for the host cities of over $10 billion, with the 2008 Beijing Summer Games exceeding $45 billion in total costs and the 2014 Sochi Winter Olympics topping $50 billion. The average Olympic Games from 1960 to 2016 went 156% over budget. Unfortunately, host cities typically do not experience sufficient increases in economic activity (for example, due to tourism and television rights) to balance these costs. The new infrastructure required to host the games can also have the effect of displacing thousands or even millions of local residents to make way for new facilities.

Bids to host the Olympic games have declined drastically in recent years: eleven cities bid in 2004, ten bid in 2008, and nine bid in 2012. Compare that to the 2022 Winter Olympics where, after several countries withdrew their bids, only Beijing, China and Almaty, Kazakhstan were left for consideration. Similarly, several cities withdrew their applications to host the 2024 Summer Olympics, leaving only Paris, France and Los Angeles, California. The IOC awarded Paris with the 2024 Summer Games, and awarded the 2028 Summer Games to Los Angeles, possibly in an effort to avoid a dearth of applicants in a future call for 2028 host cities.

Questions for the IOC to consider include: Should the IOC limit the host city applicant pool to cities with existing infrastructure sufficient for the Games? If so, how does the IOC balance that decision with the desire to make the Olympic games universally accessible? Are there any specific terms that could be included in contracts with host cities to help prevent some of these problems?

Further Reading:

Olympic Agenda 2020 – Closing Report:
https://stillmed.olympics.com/media/Document%20Library/OlympicOrg/IOC/What-We-Do/Olympic-agenda/Olympic-Agenda-2020-Closing-report.pdf

Council on Foreign Affairs – The Economics of Hosting the Olympic Games:
https://www.cfr.org/backgrounder/economics-hosting-olympic-games

Georgetown Journal of International Affairs – Why Cities No Longer Clamor to Host the Olympic Games:
https://gjia.georgetown.edu/2021/04/19/why-cities-no-longer-clamor-to-host-the-olympic-games/

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