Cities worldwide compete to win hosting rights for the Olympics, but new research shows it’s a prize most countries can’t afford to bring home.

Anyone who’s seen the new stadium construction and clean-up efforts in China knows that during the run-up to the Olympics, the local economy booms. According to sports economics professor Brad Humphreys, that boom rarely lasts for long. Countries typically end up with much lower economic growth a year after the games have left.

Much of that is because city budgets are far overblown — Beijing’s games, slated to start August 8, have already run up a $40 billion tab, compared to the original $1.6 billion budget. The 2004 games in Athens, GA, were budgeted for $1.6 billion and that ballooned into $16 billion.

The worst example: Montreal taxpayers have finally paid off the cost from the 1976 summer games in Quebec. The city was enjoying a gross domestic product (GDP) of 6% the year of the games, but that number plummeted to 3.5% the year after.

During Barcelona’s 1992 Olympics, the GDP actually flattened out. The country fell into a recession immediately after and the economy shrank by 1% over the next year.

Of course, Humphreys’ numbers are speculation at best. Although he points out plenty of examples where a country’s economy suffered post-games, many Olympic celebrations made a profit. The 1984 games in Los Angeles and Salt Lake City’s 2002 winter Olympics both turned out for the better for their host cities.

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Tags: Beijing, Los Angeles, Olympics, Salt Lake City