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HONG KONG (CNNMoney) — Rio has handed over the Olympic flag to Tokyo, but Japan has a tough job on its hands to make an economic success of the 2020 Games.
Tokyo's preparations have already been plagued by scandal and cost overruns. And some experts doubt the Olympics will help Japan's stagnating and debt-laden economy.
"I don't see the Games leading to any economic boom for Tokyo," said Andrew Zimablist, an economist at Smith College who has studied the effects of hosting major sports events. "The historical evidence doesn't suggest they will and the early evidence from their plan isn't encouraging."
Officials hope to use the Tokyo 2020 Olympics to attract visitors and promote Japanese business and innovation. Prime Minister Shinzo Abe is playing his part, popping up in Rio dressed as video game character Mario.
The Bank of Japan estimates that the Olympics will lift the country's economic growth by as much as 0.3 percentage points per year through 2018.
U.S. economists Robert Baade and Victor Matheson take a different view. In a paper published in April, the academics said studies of previous Games show "actual economic impacts that are either near-zero or a fraction of that predicted prior to the event."
Meanwhile, the cost overruns that have marred past Olympics are already a reality for Tokyo. Last year, Japan had to scrap the original design for an ambitious new stadium after its cost ballooned to 250 billion yen ($2.5 billion).
Since Tokyo was awarded the Olympics in 2013, two of the city's governors have resigned. On top of that, the organizers have had to contend with allegations of bribery in the bidding process and a plagiarized logo.
Yuriko Koike, who took office as Tokyo governor this month, has promised to review the cost of holding the Games. The organizing committee has admitted its operating budget will be much higher than the initial estimate of 350 billion yen ($3.5 billion) — and that figure doesn't cover the cost of building all the new facilities.
Experts say Olympic hosts often end up running a deficit that simply adds to their debt burden.
"Given the expenses associated with specialized venues and event operations, especially security, it is difficult for the revenues directly generated by the Olympics or the surrounding tourism to cover the cost of the event," Baade and Matheson wrote.
The organizers are talking to Tokyo city and national officials about how to share out the billions of dollars in costs.
"They have to avoid burdening Tokyo with infrastructure that won't get used afterward," said Jeff Kingston, a professor of Asian studies at Temple University in Japan. Venues need maintaining long after the Games are over.
Japan's government debt is already an astonishing 1.2 quadrillion yen ($12 trillion), around 2.5 times the size of the economy.
The country is struggling to recover from three recessions in the past eight years, the second of which was caused by the devastating earthquake and tsunami that hit northeastern Japan in March 2011.
"There's divided opinion about spending all this money on a showcase event when there are other pressing problems," Kingston said, underlining concerns that the Games are taking money away from devastated areas.
As a gesture, he suggested, organizers could move some of the events — like cycling or the marathon — out of the wealthy capital to the quake-ravaged Tohoku region.
— Yoko Wakatsuki contributed reporting.
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