Experts Need Not Apply: Economists Excluded From Olympic Study Committee

Perhaps you can’t fool all the people all the time, but many politicians certainly seemed to be trying.

–Andrew Zimbalist

As chair of our school building committee, I’m in the midst of developing school building project. It’s a long, sometimes tedious, sometimes grueling, chore. It’s my town’s version of a mega-project, and certainly the largest project I’ll ever be involved in. Fortunately, we are guided through the process by a project manager and an architectural firm. These folks are our representatives in our dealings with the Massachusetts School Building Authority (MSBA), which will fund about 60% of our project. It would be nice if we could eschew some of the bureaucracy and the experts, but quite frankly, a lot of money would wasted without them. The MSBA and our hired experts make sure our decisions are fiscally sound and educationally feasible, and because schools are their business, they know what they’re doing.

What’s good for building schools, however, evidently isn’t good for the Olympics. The Special Commission Relative to the Feasibility of Hosting the Summer Olympics in the Commonwealth passed over three different economists in favor of politicians and business people. This was the committee appointed to examine the feasibility of Boston hosting the Olympics.

The Commission was guided by “two core principles to be used in determining feasibility”:

(1) any potential investment in an effort to host the Olympic Games could only occur if it was aligned with the long-term economic development and infrastructure needs of the Commonwealth

(2) any potential investment would offer clear, long-lasting, and significant legacy benefits to the Commonwealth after the Games had come and gone.

One might think an economist or two specializing in sports and building stadiums might be helpful in determining the effects of the Olympics on long-term economic development, but the powers that be decided that the commission should be filled with event boosters.

Andrew Zimabalist should know. Stan Rosenberg solicited his resume for the Commission. Yet Zimbalist was not appointed. He tells the following story in Circus Maximus, his book about the economics of the Olympics:

Mitt Romney suggested to Massachusetts governor Deval Patrick that Boston bid to be the host city. Patrick took the matter to the state legislature which in turn appropriated funds for a study to be performed by a ten-member commission to be appointed by the governor.

After passing the appropriation, Massachusetts state senator and majority leader Stan Rosenberg e-mailed me to ask if I would be interested in serving on the commission. I responded affirmatively, depending on the timing and volume of the work involved. Senator Rosenberg [who represents Northampton where Zimbalist, an occasional guest on public radio, teaches at Smith College] thanked me and asked me to send him a résumé. He then sent my résumé with a cover letter to Deval Patrick, urging my appointment to the commission. Apparently, a similar interaction occurred between Victor Matheson, an economist at the College of the Holy Cross in Worcester, Massachusetts, and an expert on mega-event economics, and another state legislator. I also pointed out to Senator Rosenberg that Judith Grant Long, a well-respected expert on the effect of the Olympics and other sports mega-events on urban economies, taught at Harvard University.

As it turned out, Governor Patrick did not appoint any of us to the commission. Instead, eleven executives were appointed, all from the tourism industry and construction, the industry that had the most to gain if Boston were to host the games. After several months the commission concluded that the matter warranted further study. As of mid-July 2014, no decision had been made, although the USOC had selected Boston as a finalist among possible U.S. host cities.

With Governor Patrick’s maneuver, my cynicism about our political process and what interests it serves reached an all-time high. Perhaps you can’t fool all the people all the time, but many politicians certainly seemed to be trying.

On the eventual makeup of the Commission, Zimbalist should be corrected. Six of the eleven commissioners represented state or city government. The remaining five–the private citizens–were all business people. Zimbalist blames Patrick, but the report of the commission clearly suggests that the senate and legislature’s leadership were equally responsible.

Here’s a list of the members:

The Governor named Mr. John F. Fish (Chair), Chairman and CEO, Suffolk Construction, Mr. Stephen Freyer, President, Freyer Management Associates, and Steven Tompkins, Sheriff, Suffolk County to serve on the committee.

Former Senate President Therese Murray appointed Eileen Donoghue, State Senator and Senate Chair, Joint Committee on Community Development and Small Business, Mr. Ralph Cox, Principal, Redgate Real Estate Advisors

Speaker of the House Robert DeLeo appointed  Cory Atkins, State Representative and House Chair, Joint Committee on Tourism, Arts, and Cultural Development and Mr. Daniel O’Connell, President and CEO, Massachusetts Competitive Partnership.

The Senate Minority Leader’s appointee was Mr. Jonah Beckley, General Counsel.

The House Minority Leader’s choice was Ms. Andrea Crupi, Legislative Aide.

The Mayor of the City of Boston appointed Ms. Cindy Brown, President & CEO, Boston Duck Tours and Frost Ice Bar, and Mr. Christopher Cook, Director of Arts, Tourism, and Special Events, Office of Mayor Martin J. Walsh

I don’t know any of these folks, but I’m sure none of them has written a book on the economics of the Olympics. And I’m willing to bet none of them has advised New York City on hosting the Olympics. And although one or two could have a degree in economics, I don’t think any of them is an economist or a tenured professor at a prestigious Massachusetts college or university. In fact, I don’t know of any reason why any of these people should have been excluded from the Commission. For all I know, their experience is and was valuable. But was there a skeptic among them? Was there someone with an extensive research background in the Olympics or similar mega-events? The answer seems to be no. Instead of an economist, an actual expert, the Special Commission Relative to the Feasibility of Hosting the Summer Olympics in the Commonwealth got the CEO of a duck boat tour company.

If my fellow citizens decide to build a new school, it is very unlikely that it will greatly exceed its budget. Large projects rarely come in under budget, but the MSBA, our project manager, and our architect, almost guarantee that we will be very close to our estimate. The reason for such precision is simple: building schools is their business. They’re experts. Our government’s decision to leave Olympic experts out of the feasibility process doesn’t bode well for the their cost containment.