Are the Olympic games a bad deal for host cities?

SILENCE FILLS the official merchandise shop in Tokyo’s Aqua City mall, just steps from the Olympic village. It had hoped to do brisk business selling everything from T-shirts to traditional daruma dolls to hordes of fans. But the pandemic means that the games, which are due to open on July 23rd, will proceed with little fanfare. Sales are just 10% of what was projected, the shop’s manager laments. The outlook for the wider gains from the Olympics is similarly gloomy—but covid-19 is only partly to blame.Economists have long argued that, rather than consumption, tourism and prestige, the games leave high debt, wasteful infrastructure and onerous maintenance obligations. In a 2016 paper Victor Matheson and Robert Baade, two American academics, concluded that “in most cases the Olympics are a money-losing proposition for host cities.” The games this year offer plenty more grist for the sceptics’ mill. “It would have been better not to have them,” says Suehiro Toru of Daiwa Securities, an investment bank, expressing a sentiment common in Japan among economists and non-economists alike.