Should Governments Subsidize the Olympic Games?

I was privileged to visit Beijing in late April this year and quickly noticed the excitement and anxiety of the Chinese government and its people over the Olympics that start on this auspicious date. Not only was this a critically sensitive period because the protests that accompanied the torch in a number of cities made the government to go out on a public relations drive but there was concern about pollution in the city. My thinking then was that based on what it had achieved and the way in which the games are hosted, China is a deserving host because the games have become largely commercial.

As the games start, economists as Daniel Gross of Slate Magazine are reviewing algorithms and models to guess how many medals the Chinese team will win while politicians are worried about the possibility of a politically embarrassing event. Both are relevant questions really though it is even more important to ask whether the public expenditure on this sports fest is altogether reasonable. The answer as stated on Los Angeles Times here and argued on the Adam Smith Institute's blog here are unequivocally that it is not justifiable public expenditure.

Being a sports fan, I think that public expenditure on the Olympics is unjustified. One approach may be to entirely privatize the games and let a consortium of corporations or other sponsors bid for the games every four years and then invite countries to enter for the events. While this would incite protests as commercialization of the games, the approach would ensure that taxes are not spent in the bidding war to host games, politicians are cut from using taxes to gain political clout and that there's honesty about the games. It is a commercial show with the tax payers taking the bill. That is the unfair bit.