This time, the economists were right

Although medical doctors are not blamed for not predicting the exact time of a patient's death, economists are blamed when they fail to predict the timing of a crisis. Both doctors and economists are much better at explaining what happens when it happens. Sometimes, it takes time and a lot of evidence to reach conclusions. There is one particular field where most professional academic economists have reached a consensus: large sports events are bad for the economy. In a few weeks, sports-mad TV audiences all over the world (myself included) will enjoy a new edition of the Olympic Games. For the first time, however, the majority of the public opinion of the host country and city are against the event. The relays of the Olympic torch are being boycotted in Rio. 24 years ago I participated in the relays of the Olympic torch in Barcelona 1992 and all the city were celebrating and joining the big party. One of the differences between now and then is that now we know about the work of excellent social scientists like Andrew Zimbalist and Bent Flyvbjerg and many others. Their lesson is clear: the social costs of the Olympic Games and similar large sports events are higher than the social benefits. In Barcelona we were very lucky to have unique historical circumstances, and to coordinate the games with a historical process of urban transformation right after a military dictatorship that had marginalized our city. However, even in Barcelona we had white elephants and cost overruns. The problem is not Brazil, it is the Olympic Games and the abusive monopoly that sports governing bodies have over bidding cities. Until the structure of global sports is not deeply reformed, the tax payers of abused countries will keep footing the bill and suffering the consequences.