The IOC and Olympic bids from democracies and authoritarian regimes – A socioeconomic analysis and strategic insights

Abstract

In this socio-economic study, the bidding processes for the Winter Olympic Games in 2022 and the Summer Games in 2024 and 2028 serve as case studies to scrutinize the decisions linked to the bidding process in democratic countries and authoritarian states. Transaction cost economics is employed as a lens to outline the problems that the findings pose for the IOC and to understand why the organization has to keep a certain proximity to authoritarian states for strategic reasons. This measure can be considered an insurance policy because of the high and likely sunk ex ante transaction costs that characterize bids from democratic countries. It will become apparent that keeping good working relations with authoritarian governments helps the IOC to secure the future of its main revenue driver, the Olympic Games, thus providing for its own future. Furthermore, the IOC’s decision to include the Summer Olympic Games in 2028 in the bidding process originally geared towards the Games in 2024 will be outlined as a logical consequence of the developments that are analysed in this study. This strategic move will turn out to be a logical consequence of the developments that are analysed in this paper.

The Legacy of the Olympic Games: A Review

“…These venues often remain 'white elephants' after the event and are considered a negative consequence of the Games. Bearing in mind that almost all of the failed public referenda were connected to Winter Games (Könecke & de Nooij. 2017), it can be assumed that the perception of their legacy is rather problematic.…”

Does the Olympic Agenda 2020 Have the Power to Create a New Olympic Heritage? An Analysis for the 2026 Winter Olympic Games Bid

“…The fact that, for the first time ever in its history, the IOC decided to award the Summer Olympic Games to two bidding cities (Paris (2024) and Los Angeles (2028)) reflects two major issues: firstly, justifying fruitless, cost-intensive bidding attempts has become difficult for local policy makers and secondly, the IOC is struggling to explain to its stakeholders the awarding of the OG primarily to non-European countries. Könecke and De Nooij [2] analysed the Olympic bids for the WOG 2022 and the OG 2024/28 and found that in both cases only two out of ten (WOG 2022) and seven (OG 2024/28) candidates respectively remained for the final decision in the IOC General Assembly. This trend was also a warning sign to the IOC as in previous years the interest in staging the OG had been higher.…”

“…However, researchers' attention has recently shifted and the interest in understanding the role of local residents in sports events as well as understanding the driving forces influencing the support for such events has increased. One reason for these new research fields is the fact that in recent years almost every public referendum on hosting the Olympic Games (OG) has failed [1,2]. Thus, understanding this opposition to the OG and the attitude towards such events as well as analysing the possible heritage they leave for hosting sites is more important than ever.…”

Cost and Revenue Overruns of the Olympic Games 2000–2018

“…Some cities even withdrew their bid before they had a referendum because of a lack of public or politicl support (Barcelona 2013, Oslo 2014, Boston 2014, Stockholm 2014, Rome 2016 and Budapest 2017) . Consequently, there is an increasing number of cities that are resigning from a bidding process or not entering the bidding process (Könecke & Nooij 2017) . In this context, the phenomenon of cost overruns is important to raise (Zimbalist 2015) .…”