Public Funding for the Olympics Games

Public Funding for the Olympics
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Public Funding for the Olympics
The 2018 decision by the residents of Calgary not to host the 2026 winter Olympics remains a subject of debate bearing its prospective economic impacts. Multiple analysts have instilled their understanding of the decision and the economic impacts that Calgary faces following the decision. Historically, Calgary is one of the most experienced cities when it comes to hosting the Winter Olympics has hosted a similar event in 1988. Calgary’s exit exposed to receding interest to host the historical event with only Sweden’s Stockholm and Italy’s Milan left to compete to host the event. Also worth noting was the premature exit of Graz, Austria, and Sapporo, Japan in the race to host the Winter Olympics. Advanced analysis of the positive and negative externalities of hosting the events implies a right decision by the city of Calgary when they rejected the idea of hosting the 2026 winter Olympics.
History
Olympics have not born historical advantages economically. The Montreal case of 1976 remains a case of reference as far as hosting the winter Olympics is concerned (Salvati & Zitti, 2017). The 1 billion debt in Montreal marked the beginning of an economic challenge that the city would manage in years. The only Olympic games that delivered proper financial benefits was the 1984 Los Angeles Olympics that generated a surplus of $200 million (Zehndorfer & Mackintosh, 2017). No other city has emulated the success of LA. Partly, the success at LA stemmed from the fact that the city was equipped to host the events. The government and planners did not spend much to host the events. Similarly, the Lake Placid events in 1980 led to $10 million in debts, $289 million in losses for Lillehammer, and Vancouver ended up with $630 million in debt after hosting 2010. Also worth remarking is the understanding that hosting winter Olympic games have a history of exceeding the initial budgets once the preparations begin. While Calgary was 85% ready for the events, it was inevitable that the budget would balloon beyond the set limits.
Subsidies to the Project
The government justified its support for the Winter Olympics projects with notable subsidies. The subsidies were to mark a tune of $72 million. The proceeds would be directed to prepare for the games with limited budgetary impacts on the city’s programs (Zehndorfer & Mackintosh, 2017). With such subsidies, Calgary would be immune from the inevitable negative externalities from the games. The indulgence through subsidies would affect the government’s operations effectively. In an analysis of the long-run effects of the 12 winter Olympics, it was noted that the events trigger a minimum of 20% increase in the national expor...