Source: Scholastic - Go for Gold!

Any city that wants to host the Olympic Games puts in its name to the IOC and is considered an "Applicant City." For the next ten months, the IOC investigates the city on several points:

1) The city must prove that it is big enough to handle the Olympics. With the games come a huge number of tourists, athletes, journalists, and politicians. They must show that they can host the games in new stadiums and venues, they must house all the people in adequate hotels, and they have to transport everyone from one place to the next with a reliable mass transit system. They also need to show that they can handle the high level of security needed at the games.

2) The city needs to convince residents that the expenses of covering the Olympics (which may be covered by raising taxes) are worth it in city improvement and new jobs.

3) The cities need to maintain a highly positive media exposure to carry the games. Fourth, the tangible effects of hosting the Olympic games may not prove beneficial if the bid committees do not exercise proper judgment in developing the city to host the Olympics.

If the IOC decides that a city has fulfilled the three points above, the city is considered a "Candidate City" and goes into the second phase of the process. After submitting an application and an application fee, the IOC makes a final judgment on which city is the best candidate for the coming Summer or Winter Olympic Games.

The costs for bidding for the games are incredibly high. Bid committees must pay an application fee (The fee for hosting the 2012 Olympics was $150,000 U.S.), to the IOC. This high fee is meant to discourage cities that are not committed to the efforts necessary to host the Olympics. Following these fees, the cities generally need to begin large construction projects like building the "Olympic Village" to house the athletes, new sports arenas and stadiums, and transportation systems.

TO TRIUMPHANT shouts of “Banzai!” it was announced on September 7th that Tokyo would host the 2020 Olympic games. The city fended off not-especially-stiff competition from Madrid, whose chances were damaged by Spain’s sickly economy, and Istanbul, whose image was tarnished when its police spent the summer practising for the 100-metre baton charge. It was not the strongest field of candidate cities in Olympic history. But the contest demonstrated the lengths that countries will go to for the privilege of hosting the world’s biggest sporting bash. Shinzo Abe, Mariano Rajoy and Recep Tayyip Erdogan all flew to Buenos Aires, where the International Olympic Committee (IOC) was voting, to make the official case for their respective countries. Tokyo had previously bid unsuccessfully for the 2016 games; Madrid had bid for both 2016 and 2012. Poor Istanbul has now been rejected five times. Why are cities so keen to host the Olympics?

On the face of it, throwing the world’s biggest party—and paying for it—is not especially appealing. The cost used to be fairly modest: London’s 1948 Olympics cost £732,268, or about $30m in today’s money. Nowadays hosting the Games is a different business. The 2008 Beijing games are reckoned to have cost about $40 billion. The Sochi Winter Games cost $51 billion. Tourism may help to offset the expense, but a spike in arrivals is not guaranteed: Beijing saw a drop in hotel bookings during its Olympic summer. And the chance to spruce up a city sometimes ends up creating eyesores instead. Some of Greece’s costly stadiums now look as run-down as the Parthenon.

The main reason cities want to host the Olympics is that, perhaps against the odds, they are wildly popular with the voters who foot the bill. The IOC found that public support for hosting the games was around 70% in Tokyo, 76% in Madrid and 83% in Istanbul. Londoners, sometimes a cynical bunch, were in favour of the 2012 games. At the end of the year, with the crowds departed, eight out of ten said it was worth the extraordinary cost, even as cuts to public services began to bite. Popularity aside, Olympic bids often have other agendas. The Beijing Games were intended to show off China’s spending and organisational power. London’s games were a means of bringing back to life a poor part of the capital at a speed that defied normal budgets and planning regulations. Tokyo hopes the 2020 games can gee up Japan’s lacklustre economy.

It is a high-risk game. Rio’s hosting of the 2016 games had strong local support during the bidding process, but later became a focus of those protesting against government waste (they also raged against the World Cup, which Brazil hosted in 2014. Politicians can be left looking ridiculous, or worse: Mexico’s 1968 Olympics are remembered as much for the massacre of student protesters ten days before the games as for the sporting events themselves.