Domestic policy consequences of international mega-events: Evidence from China

Mega-events such as the Olympic Games, the World Cup, the World Expos, and the G20 Summit play important roles in international political economy in the age of globalization. But we know little about how they shape domestic politics and policy processes in their host countries. China has emerged as the leading host of various sports, cultural, economic, and political mega-events in the past decades. Employing an original panel dataset of Chinese cities from 2001 to 2019, we find that cities that host mega-events gain an advantage in bargaining with central bureaucracies for policy resources. Using subway investments as an example, we demonstrate that host cities not only obtained centrally regulated infrastructure investments that directly serve the needs of the events, but also achieve development that they otherwise could not. The result is robust with two-way fixed effects models and after accounting for various alternative explanations. We show that host cities gain advantage because the events capture the attention of national leaders. National leaders have power over central bureaucrats' careers and thus steer their decisions, and they see the success of mega-events as an opportunity to project national strengths. Our findings highlight the domestic policy consequences of international events in the age of China's rapid rise and integration with the world.