Why the Olympics are good for infrastructure

By Felix Salmon
October 1, 2009
Ryan Avent explains, contra Matt Yglesias, why hosting the Olympic games makes sense from a behavioral-economics perspective:

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Ryan Avent explains, contra Matt Yglesias, why hosting the Olympic games makes sense from a behavioral-economics perspective:

Infrastructure benefits begin appearing years down the road and last for decades beyond that, while many of the costs — the political headaches, the need to put together financing, the disruption of construction, and so on — are relatively immediate. Winning the Olympics ties an immediate benefit to the immediate costs.

More to the point, it sets a deadline. Infrastructure projects invariably end up plagued by endless delays: just ask anybody who currently commutes on the Second Avenue subway line in New York. And deadlines are often the only way that anything ever gets finished: just ask any journalist. If you win the Olympics, you know that for all the construction headaches you’ll have to endure before they open, at least you’ll have some decent infrastructure thereafter. If you don’t win the Olympics, then even if you’re enlightened enough to invest in infrastructure, you can have no faith in its arrival.

Rio de Janeiro has desperate need for a good subway system. If it wins the Olympics, it will probably have just such a system by 2016. If it doesn’t win the Olympics, there will still be a lot of infrastructure investment in the city. But without a deadline, I don’t think anybody has any faith in getting that subway system any time soon.

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