In light of the current olympics in Russia, I thought this would be a good time to examine how the 2008 olympics effected the Chinese economy. The traditional argument for a developing nation hosting the olympics is that the influx of tourism and international attention will provide a launching point for the economy. In other words, the olympics are often seen as a catalyst capable of making developing nations international players. However, extensive evidence from the China games, as well as others, suggests that there is little international benefit from hosting the olympics.
The question remains, is there any economic benefit from hosting the olympics? Yes. Most host countries experience increased rates of growth for a period of a few years leading up to the olympics. This is caused by the significant increase in government spending associated with being a host nation. In China’s case, roughly $50 billion dollars were spent to successfully host the games. This naturally produced a sizable increase in China’s GDP. However, GDP returned to normal and growth rates stabilized shortly after the games. So while hosting the Olympics might bring some level of pride to a host nation, the economic benefits are insignificant.
Further Reading: http://policy.paramadina.ac.id/v3/?p=739