The IOC and Olympic bids from democracies and authoritarian regimes – A socioeconomic analysis and strategic insights

Abstract

In this socio-economic study, the bidding processes for the Winter Olympic Games in 2022 and the Summer Games in 2024 and 2028 serve as case studies to scrutinize the decisions linked to the bidding process in democratic countries and authoritarian states. Transaction cost economics is employed as a lens to outline the problems that the findings pose for the IOC and to understand why the organization has to keep a certain proximity to authoritarian states for strategic reasons. This measure can be considered an insurance policy because of the high and likely sunk ex ante transaction costs that characterize bids from democratic countries. It will become apparent that keeping good working relations with authoritarian governments helps the IOC to secure the future of its main revenue driver, the Olympic Games, thus providing for its own future. Furthermore, the IOC’s decision to include the Summer Olympic Games in 2028 in the bidding process originally geared towards the Games in 2024 will be outlined as a logical consequence of the developments that are analysed in this study. This strategic move will turn out to be a logical consequence of the developments that are analysed in this paper.