The Olympic Games, as we know them, have come a long way since their origination in 776 BC. Originally the games were exclusively held for Greek citizens in honour of Zeus; the games were held every four years and only men were allowed to participate. In 394 AD the games ceased under the order of Roman Emperor Theodosius, as Rome conquered Greece and Olympia began to fall.
The Olympics were reborn in 1896, comprising of nine sports; split into two different events in 1924, a Summer and Winter Games. Today we see the games being held in two year intervals (alternating between Summer and Winter Games), comprising of fifty-six sports (forty-one Summer sports and fifteen Winter sports).
The costs associated with the Olympic Games are incurred for years before the event is held to ensure that the infrastructure of the country is capable of supporting the influx of athletes and spectators. A study by the University of Oxford reported that from 1968 to 2012, all of the Summer and Winter Games ran over budget; the average amount of excess spending came to 156%. Many countries have to turn to taxpayer money to fund the initial costs, but whether these are ever fully recovered or translated into GDP growth are another issue altogether.
The costs incurred can be divided into operational, direct capital and indirect capital. Surely with all this capital expenditure a country should experience an increase in GDP or an appreciation of their currency? At a quick glance of the past 6 Olympic Games, (one year prior, in the year of and one year post the Olympic Game they held) it can be seen that 20% of the host countries have experienced an increase in GDP, whilst 80% have seen a decrease. In contrast, 80% saw an appreciation of their currency (relative to the USD), whilst 20% saw a depreciation. Although many factors contribute to these metrics, it is quite interesting to note and possibly an area requiring more in-depth research.
Although the Brazilian Games have an estimated cost overrun that is modest in comparison to historical Summer Games, 51%, the overrun is still apparent and concerning when you consider the state of the Brazilian economy. Criticism has been given to the Brazilian government for spending more on the Olympic Games than on treatment for the Zika virus. Brazil has one of the highest reported incidence rates of Dengue (a virus carried by the Aedes aegypti mosquito, believed to spread the Zika virus) and an estimated 1.5 million citizens who have been infected by the Zika virus, according to the Brazilian Health Ministry.
I suppose one question remains, should a country under so much economic strain be hosting expensive events when, historically, the costs are rarely outweighed by the benefits?