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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Are you alleging that the 2012 games will bring more orthodontists to London somehow?

Posted by VennData | Report as abusive

Hmm, so essentially your argument is that because once the Olympics have been granted there is no going back, the political process cannot interfere as much in the decision making. Or in other words, residents lose control of their own purse strings and the drunken cowboy spending on infrastructure eventually proves to be in their best interest.

Sounds like a ringing endorsement for authoritarianism, Felix.

I’m from Vancouver, so I know a thing about this. Our province was probably in the best fiscal shape of the entire country for a while (Alberta too dependent on oil). But massive government spending has now left us with huge deficits. A good 40% of the city was against their tax dollars being used without their consent. And they were walked over.

Did we need a rebuild of the Sea to Sky? Yes, absolutely. Did we need a subway line to the airport? Yes. But I hardly think it was necessary to throw in a curling rink and a bobsled track to get those done. Not to mention the absurd speculation that has pushed up the cost of living and distorted our local economy.

Montreal hosted the games in ’76. The debt was just recently paid off. I wonder what the interest on that debt could have bought Montreal in terms of infrastructure. Hmm?

This kind of gets to the point of why cities want to host these events in the first place. They are really the only way cities can justify the expense of massive infrastructure investments. Cities are even inventing events so that they can build infrastructure. The somewhat recent Forum of Cultures in Barcelona, for example. This “event” allowed Barcelona to complete infrastructure plans created for when they hosted the Olympics.

Posted by Chris | Report as abusive

Mark my words: Rio will not have a decent subway system by 2016.

Posted by Joao | Report as abusive

It did work for Beijing, which had only two subway lines for the longest time. That always struck me as something absolutely nuts, or something straight out of the National City Lines playbook.

Posted by Larry | Report as abusive


I´m also optimist about the impact of the Games on Rio infrastructure. But actually the subway network isn´t going to improve very much due to the Olympiads. Most of the improvements are incremental, and were already planned anyway _ of course the “deadline effect” you mentioned can be useful.

Authorities have mentioned the “hope” that the subway system can be extended to Barra da Tijuca (the neighborhood where a lot of action will happen)on time for the Olympiads, but I think this very unlikely. Barra is separated from the most populated areas of Rio (South Zone and North Zone) by two very big mountainous structures (“maciço da Tijuca” and “maciço da Pedra Branca”), and digging tunnels under it would be extremely expensive. Giving the fact that Rio´s subway construction started by 1970 and we still have little 42 kilometers in extension, one can´t really expect such quick increase of the network.