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An introduction to the social impacts of the Olympics

The Olympics project is large and complex. In this revised version of our previous paper of the same name, we draw your attention to significant impacts, the paucity of procedures for impact evaluation, and the processes surrounding the bidding for, and promotion of, the Olympic event.

    Showing off or showing up the city
    Gary Cox, 1996

    Many social impacts are cumulative and wide ranging over space and time. With events such as the Olympic Games with long lead times, the nature and dimensions of the event may change significantly, complicating impact assessment. Impacts of so-called ‘hallmark’ events frequently show up the city rather than show it off. Increased congestion, evictions, price increases (including land-rent value increases and attendant gentrification), harassment of sex workers and the displacement of the young and low income, are all noted by Cox as impacts of serial Olympic Games, Grand Prix, Americas Cup and World Expo.

Negative social impacts in London include:

Clearance of settlements, firms and sporting activities: The Clays Lane Peabody Estate (formerly Housing Co-operative) was removed for the event with the displacement of 425 tenants, along with two Gypsy and Traveller sites, 209 Lower Lea Valley businesses (nearly 5,000 jobs dispersed from the area), and the Manor Gardens Society Allotments. Construction of the Olympic Park has severely curtailed sporting activities on the Hackney Marshes, including the use of canal and river towpaths, and the Eastway Cycle Circuit (now relocated seven miles away at Hog Hill, Redbridge). The Carpenters Estate in Newham is the latest casualty of the Olympic effect, with the last remaining tenants and leaseholders in danger from University College London’s plans to build a campus off Stratford High Street. Some tenants on the estate will also be displaced by the BBC and Al Jazeera sports news teams who are renting space in the tower blocks during the Games.

Diversion of Lottery funding from voluntary organisations: The National Lottery will contribute £2.2 billion to the funding of the Olympic Games.

Increased securitisation: Newspaper reports suggest that 12,000 police may be involved in security in and around London during the Games, alongside up to 21,000 security guards across the country. US officials are bringing 1,000 agents (some of whom will be armed) and 500 FBI officers, to protect contestants and diplomats. Sponsors such as Coca-Cola will have their own private security personnel. The MOD may deploy up to 12,000 troops, including 4,000-5,000 specialist personnel providing bomb disposal, air defences, and a maritime capability. There will be a partial militarization of the police, with armed police on the London Underground and railway network, and also at training venues around the country. CCTV networks are intended to be integrated across the capital, and mobile location tracking and facial recognition technology will be in operation. Ground-to-air missiles will be placed on the tops of certain tower blocks and in beauty spots such as Oxleas Wood and Blackheath. With so many security personnel on the ground in east London and dispersal zones in operation in Newham, there are fears of an increase in racist policing, especially ‘stop and search’.

Distortion of the residential property market: House prices across the Olympic area increased differentially since the bid decision, with Leytonstone up 23 per cent against a London average of 15 per cent in 2007. After the crash in 2008, however, Bloomberg (2011) suggest that the Olympic areas have been blighted with prices falling and an overall rise of only 19 per cent (compared to a London average of 27 per cent). Newham remains the capital’s second cheapest location for buying a house. However, the run up to the event has seen a sharp escalation in rental prices across the host boroughs (between five and 35 times their typical rates).

Shifts in governance of the population: Economic development priorities have been complemented by a new imperative toward the virtuous, disciplined and responsible autonomy of citizenry. In the Convergence document produced by the Host Boroughs Unit, deficits of employment and income are conceived purely in terms of educational attainment and benefits ‘dependency’, and remedied by government policies (reformed structures of administration) alone. Gentrification is seen as the major force effecting ‘an equalisation of life chances’ with the rest of London.

For further information, please see our three background papers on (1) Impact, (2) Finance and infrastructure, and (3) Apparatus, available from our media centre page (scroll down).

    The role of mega events in urban competitiveness and its consequences on people
    Carolina del Olmo, 2004

    Olmo points to the conversion of city to spectacle, and most critically, the generation of a consensus that distracts from business and ‘urban’ operations which would otherwise generate opposition, alongside a higher level of repression. She argues that the Left should pay more attention to the division between use value and exchange value (economic growth and social welfare are not one and the same).

    Upon Further Review: An Examination of Sporting Event Economic Impact Studies
    Victor A. Matheson, 2001

    Economic studies exaggerate impacts of mega events by:

    1. Ignoring substitution effects (there is often a reallocation of expenditure, not a net increase in economic activity)
    2. Ignoring crowding out effects (for example, in the use of hotels, the contest may displace and diminish rather than supplement the regular tourist economy)
    3. Failing to address whether money stays in the local economy (rather than being spent in national/international chains)
    4. Non-economic costs are rarely considered (for example, traffic congestion, vandalism, environmental degradation, negative impact on residents’ lifestyles)
    5. Vested interests funding or producing the feasibility studies.

    Matheson finds no significant positive correlation between sports facility construction and economic development, in stark contrast to the claims of sports teams and leagues who assert that large economic benefits merit considerable public expenditure. A variation in estimated benefits is enough to question the validity of economic impact studies, although differences can be explained by the fact that they are highly subjective and subject to significant error or manipulation. In other cases, the size of the estimates strain credibility. Independent work on the economic impact of mega-sporting events has routinely found that the effect on host localities is either insignificant or below figures espoused by promoters.

    From managerialism to entrepreneurialism: The transformation in urban governance in late capitalism
    David Harvey, 1989

    The shift to entrepreneurial governance (which the Olympics represents) is a product of the international mobility of capital and impacts on urban institutions as well as built environments. Civic boosterism is the preserve of transient growth coalitions drawing personnel from chambers of commerce, financiers, business leaders and real estate developers, and bolstered by educational institutions, labour organisations, political parties, social movements and local state apparatuses (often with different goals). The centrepiece of entrepreneurial governance is the public-private partnership, exerting powerful influence over government at all levels. As an activity it is speculative in execution and design, and dogged by dangers. The public sector assumes the risk, the private sector the benefits. Entrepreneurial governance focuses on the political economy of place rather than territory, but can impact on a whole region. Projects divert attention from the broader problems that beset the region itself.

[Editor's note; Revised version, 27 June 2012]

London Olympics Myths pt 2.doc41.5 KB
Review of impact studies of Sport events 02.pdf29.2 KB
World Class Games in East London.doc21.5 KB
Cox Showing off the City.pdf25.12 KB

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