POSTED: January 23rd 2017

NEIL WILSON: Should the IOC believe the economists?

© Bigstock
© Bigstock

THE NEIL WILSON COLUMN / An exclusive, authoritative series from Sports Features Communications

(SFC) Michael Gove, the journalist-politician who had the first major interview with President-Elect Donald Trump this week, was dismissive last year of the negative forecasts for Brexit of the doom-saying economists. "I think the people in this country had had enough of experts," he proclaimed.

So has the wider global audience in the Olympic context. The collective noun for economists will never be consensus.

President Reagan once said that a special game of Trivial Pursuits for economists would have 100 questions and 3,000 answers. Take your pick and you will find the answer you want.

So it is with that in mind that recent economic predictions for the benefits of hosting the 2024 Olympic Games in Los Angeles and Paris should be judged when they are presented in official Bid Books to the International Olympic Committee on February 3.

The latest came from the LA bid. The Beacon Economics and Riverside School of Business Centre for Economic Forecasting and Development at the University of California predict that a Games in LA will increase the economic output in the US by $18.3 billion, and by $11.2 billion in LA itself. This, it says, is because of tourism and Games operations.

Last year, the Paris bid came up with its own figures. A Games in the French capital would benefit the French economy by $11.3 billion, according to research by economists at the University of Limoges.

The LA team went so as to conclude that there was "little doubt" that hosting a Games is an "enormous boost for a local economy", which was odd give that the California Legislative Analysis two months earlier found a "neutral long term impact".

More odd is that neither report conforms to the summary of previous Games after the event. When the British government claimed a $13.5 billion economic impact for 2012 it was widely rubbished as "far-fetched" and "creative accounting". Outside London the impact, said the Federation of Small Businesses, was "disappointing".

The problem, in economists' own parlance, is counter-factual. Predictions do not take into account what would have happened in any case. Indeed, tourism actually fell in London during July and August 2012 because of the Games being in the city.

One survey published in 2016 in The Journal of Economic Perspectives concluded: "The overwhelming conclusion is that in most cases the Olympics are a money-losing proposition".

The Sydney Games in 2000 was found to have increased economic activity in the state of New South Wales by just 0.3%. In the rest of Australia there was "little effect".

Indeed, even Los Angeles' 1984 hosting of the Games, famous for encouraging a rush of future bids to host Games because it made an operating profit, did not impress some economists. "There is no economic residue (in LA) after the Games left town," said a report entitled Bidding for the Olympics:  Fools  Gold".

Even the claimed creation of 5,043 full or part-time jobs in LA in 1984 were "entirely transitory", said the report's authors. Which rather puts in perspective the latest findings that between 74,308 and 79307 jobs could be created by 2024.

As I said, economists give you the answer you want. Far better that IOC members when they come to read the Bid Books - assuming any bother - pass over that chapter. It is entirely speculative.

** NEIL WILSON reported his first Olympic Games in Munich in 1972. He has since covered another nine summer and nine winter Olympics for various newspapers, including The Independent and the Daily Mail with whom he has worked for the last 19 years as Athletics and Olympic correspondent. He was Britain's Sports Journalist of the Year in 1984 and is the author of seven books.

****The views expressed are the author's own and do not necessarily represent the views of Sports Features Communications.

Keywords · Olympics · Neil Wilson

For more information contact:
Laura Walden ()

All original materials contained in this section are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Sports Features Communications, Inc the owner of that content. It is prohibited to alter or remove any trademark, copyright or other notice from copies of the content.