We've heard a great deal recently about why hosting the Olympics could be a boon to efforts to revitalize East London. Zimbalist, however, presents the counter-argument, that except for a few occasions (Barcelona), host cities rarely see long-term economic benefit from hosting the games.
Zimbalist details his three primary reasons why the economic argument for hosting the games is a flimsy one: "(1) The bidding process is hijacked by private interests; (2) It creates massive over-building; (3) There's little evidence that it meaningfully increases tourism."
For Zimbalist, the problems start a decade before the event itself, as cities compete to outbid each other. "The committee that nominally represents the city really represents itself and bids according to its sense of the private benefit (of its members) versus the private cost, rather than the city's public benefit versus public cost," resulting in overbids.
Although the Olympics can catalyze "long-delayed, needed improvements to the city's infrastructure," Zimbalist argues that, "the environment in which the preparations for the Games takes place is not conducive to rational, effective planning." London's preparations, however, suggest they're ahead of the game in this regard.
Finally, Zimbalist writes that there is "little evidence" to support the expected long-term benefits to tourism of the hundreds of hours of television exposure.