The winter and summer Olympic Games encompass significant work on behalf of the host cities. Before the Olympic Games begin, construction activity and preparation occur years in advance. One of the most frequently asked question once the Games are done is, “does the time and money invested to host the Olympic Games really benefit the host country?” One can assume that, aside from the pride gained in hosting, countries are expecting some benefit from their investment.

The 2014 winter Olympic Games were hosted in Sochi, Russia, home to 343,000 citizens. This year’s host country invested significantly in the opening ceremony to boost tourism and create a lasting legacy. The ceremony featured a record 88 countries, 66 world leaders, and 800 performers. The cost to host this year’s winter Olympics in Sochi was an estimated $51 billion—a record high investment. Approximately 235 projects were facilitated to prepare for the Olympics, such as repairs to infrastructure and new housing for local residents. Through improvements due to the many projects and the added tourism of the games, the city is expecting to see a lasting positive effect on the economy.

Economists…In Agreement?

Recently, National Public Radio (NPR) ran an interesting story regarding the long-term impacts of the games. One of my favorite parts of the story is this line: “Economists are notorious for being unable to agree on anything. So it’s striking that on the finances of the Olympics, they almost all agree.” Opinions usually point to the fact that once the games are over a country mostly ends up with an indebted city. This is almost in direct contrast to the expectations of Government stakeholders.

The British Government, in particular, claims that they were different. A report (nearly 1,000 pages) estimates that they earned at least $1 billion more than the $15 billion they spent to host the 2012 Summer Games. However, there has been a lot of criticism of the report, mostly because the report was funded by the government. Max Nathan, a London economist for the National Institute for Economic and Social Research, claims that it is too soon to really gauge whether or not hosting the London Olympics was worth the investment.

Photos Tell the Tale

Perhaps more telling than any economic report are images from past cities that have hosted the games. A photography project (http://olympiccityproject.com) led by Jon Pack and Gary Hustwit visits cities such as Athens (2004), Barcelona (1992), and Beijing (2008). The conditions they found in some of these Olympic villages are a far cry from their grand expectations. Some have been turned into prisons or malls while others have been left to decay.

Athens—Faliro Olympic Beach Volleyball Center – Photo credit: NBC News

It will be interesting to see what happens to the facilities in Sochi now that the Games have ended. How these facilities will be used in the future will say a lot about the long-term benefit to Sochi. According to Forbes, for some past host cities and countries, the Olympics have marked the transition to being a world player. They cite Tokyo (1964), Seoul (1988), and Beijing (2008) as prime examples. For Russia as a whole, the hope is that the Olympics has given the country a bigger starring role on the international stage and laid the groundwork for future international investment growth.