by Jim Rose in economic history, sports economics

There is a large international literature documenting cost overruns in mega-projects and mega-sports events. Mega-projects are large-scale, complex construction ventures that take many years to develop and build.

The cost blow-outs in the Olympic Games, World Cup and Commonwealth Games will be more familiar to the reader because these are in the media in the run-up to these mega-sports events.

The Olympic Games, with one exception, involved massive, multi facility construction projects to a hard deadline. The only Olympics to come in on budget was the 1984 Los Angeles Olympics. It used existing sports facilities in that city. Los Angeles was able to stage the Olympics this way because few wanted to host them after the massive cost blow-out in Montréal – see Figure 1. The Los Angeles Olympics Organizing Committee was a private concern that could host an Olympics on the cheap and still be the winning bidder because Tehran withdrew the only competing bid to host the 1984 Olympics.

Figure 1: Sports-related cost overruns, Olympics 1960-2012; original currencies, real terms



Source: Flyvbjerg and Stewart (2012), table 1.

