The Olympic Games are no doubt an event of enormous magnitude. They propel a nation into the global spotlight, bringing it to the forefront of the public’s eye, to then undergo immense scrutiny for better or worse. Sometimes the Olympics introduce a country to the world as a newborn economic superpower, a sort of coming-out party like Beijing, China, in 2008 for instance. Other times it only serves to expose a country’s weak points, such as the  political instability seen in Munich, Germany in 1972.

Yet, what is perhaps even more significant than the political or international recognition associated with the Olympics are whether or not the Olympics are actually a profitable event. Forget if the Olympics make the host nation look good. Do they make any money? After all, for a developing nation on the cusp of global preeminence, its economy is its beating heart. It will either beat fiscal lifeblood through the nation’s political veins and social initiatives, or it will condemn a country to crippling international infamy.

The only true way to determine the profitability of the planet’s most prestigious competition is to take a look at history, so let’s delve into the three most recent summer Olympics and their economic impact to date:

Beijing, China (2008 Summer Olympics)

Incredibly expensive. In fact, the opening games alone reportedly cost well over $300 M. There was $22.8 B spent on games-related infrastructure such as stadiums, roads, sidewalks etc.. The total? China spent about $40 B. While there was certainly a spike in job-creation, these positions are typically short-lived. Most of the positions are occupations that are entirely temporary and event-based, like event security or doormen for instance.

You could also look at the boom of small businesses at the time. There was an increased internal and external consumption of goods, evidenced by the fact that more than 1.76 million companies registered for business in 2008, which was an increase of 68% from the previous year. Yet, it seems that even this surge proved insignificant in the long-run. In fact, according to Bloomberg, the overall effect of the Olympics on China’s economy was “negligible.”

“Even if you tally up the estimated Olympic-related spending (over the four years prior to hosting the event)…it accounted for an average of only 0.3% of China’s total GDP each year.” So, solely from a statistical perspective, it appears the Olympics had a very minute effect. What is interesting, however, is that China is one of the only countries to have continued flourishing after the Olympics.

Its GDP increased by 8.7 percent. When viewed in conjunction with former host cities Montreal (1976), Barcelona (1992), Sydney (2000), and Athens (2004), who all not only saw a decline in GDP but were also still paying off debt due to the Olympics till as recent as last year, this is very intriguing indeed. Although China’s success and these other host cities’ decline may be because these aforementioned cities spent a greater percentage of their GDP on The Olympics than China, it is still nonetheless worth mentioning (source).

London, England (2012)

The London Olympics are a bit more interesting relative to the economy because it seems there was a larger effort made to keep track of revenue and expenses. Actually, the London government even released an enormous, “five-year, 1,000-page study conducted by a respected team of consultants”. Here’s where it gets interesting.

First off, the report is very positive. It claims that London immediately saw a return, that as of 2013 it had already seen a billion dollar return. It even has forecasts upwards of tens of billions dollars in future benefits. Yet, these facts are questionable to say the least.

Although it was independently audited, was an anonymized survey that was approved by the national audit office, and was supposedly intended to grant the public greater accessibility to the data, it was not subject to much unbiased professional scrutiny.

Stefan Szymanski, a professor of sports management and economics at the University of Michigan and one of four official peer-reviewers, said “the report provided a very bullish view, refused to comment on any of the negatives or even to really qualify any of the results…” Granted, this is one man’s opinion—but what really struck me is that there were only four peer reviewers in total. One did not even assess the report. One analyzed the redevelopment of East London, but didn’t look at the fiscal return or the numbers behind it, and the third, or the last, was not an expert in economic analysis in the first place.

When we look at GDP growth, the numbers seem to speak for themselves. The economy shrank in the last three months of 2012. This is with the supposed ‘boost’ from The Olympics, and considering the Olympics should, if anything, provide short-term benefits (in the form of event-based jobs, small business creation, etc.), it does not bode well that it was unable to do so.

Again, this data should be taken with a grain of salt considering the event itself is still in recent memory, but the facts we do have seem to tell their own story.

Rio de Janeiro (2016)

For countries with an impressive emerging economy, the Olympics make sense. They showcase power. For countries facing their “worst recession in decades; swelling unemployment, double-digit inflation and a corruption scandal that saw the sinking of the state oil company,” they are likely better off not shouldering the Olympic burden.

In 2015, Brazil’s deficit ballooned by more than nine percent and forced them to cut their previous five billion dollar budget by five to twenty percent.  This essentially translates to athletes having to watch the games on communal televisions (as opposed to individual sets in their rooms as is traditional) as well as VIPs being served beans and rice instead of gourmet meals.

It is true that Brazil’s tourism industry has shot up in recent years from $1.26 B to $2.10 B over the course of 2008-2014; but this is likely due to the World Cup in 2014. As such, a huge surge in tourism is not expected. In actuality, 400,000 tourists are predicted to visit, but most of their business will go to the hospitality and tourism sectors of the economy, so it is unlikely to benefit local communities very much because those industries have little to do with local inhabitants.

Additionally, the Zika virus poses problems of its own, undoubtedly negatively impacting revenue. Yet, even the Zika virus and its implications pale in comparison to this simple fact—”large companies investing in the Olympics have managed to avoid taxes.” These taxes are what could prop up Brazil’s failing economy, and they have been neglected entirely. If the Olympics are supposed to help strengthen Brazil’s economy, why are they not contributing to it?

While of course, it is much, much too early to confidently claim the Olympics will either help or hinder Brazil, the current situation does not exactly lead us to expect a positive forecast, and if history lends any insight, it’s that the Olympics will indebt Brazil for decades to come.

Numerically speaking, the Olympics have not traditionally bolstered economies, regardless of public perception. What they might do, however, is properly introduce an up and coming nation to the world as a global superpower, but only when said nation is properly equipped to host the games. When they are not properly equipped, we see the Olympic Torch of Crime shine light on everything a country doesn’t want us to see.