Some cities have managed to use hosting the Olympics to make a step-change in their global profile - and hence in their economy. A good example is Barcelona, which has transformed large chunks of what was already a fascinating city to become one of Europe's most important conference centres.
Others have run a great Games but been left with underused facilities and debts that have to be serviced. The best example of that is Sydney, where the main area of the Games has failed to become the vibrant new development the promoters hoped for. Others have been left with debts to be paid for by people who were not even born at the time of the event. Montreal has only just cleared its debts from 1976 and Athens looks like having a long haul ahead.
There are three economic calculations to make. One is the effect of the injection of economic activity. Next, you have to look at the long-term impact of the investment in infrastructure that might not otherwise have happened. And then you have to assess the intangible benefits created by the noise the Olympics makes.
As far as London is concerned, the first is the least important. It is a big city in a big economy. If the total investment is £10bn, that would less than 1 per cent of the UK's GDP and would be spread over seven years. In London terms, it is proportionately larger of course but the size of the Games is still quite small. You have to remember that London and its commuter region make up a larger economy than that of Greece, or even Australia. So, while the Games will add some growth, it will not be huge in the context of London's economy. Even the expense, which will irritate Londoners, is completely manageable.
The infrastructure investment is more important. London and the South-east have underinvested in infrastructure. In some areas it is world-class: telecommunications are excellent and air communications the best (if not the most comfortable) in the world. More people fly though London's airports than any other city. You can gauge the overall acceptability of the infrastructure by the flow of international businesses that choose to locate in London, despite the pressure. But there are serious gaps, particularly when it comes to rail and road infrastructure.
Managed wisely, the transport links and new housing are just what the capital needs. It has to grow and growing eastwards is the only place where there is spare land close to the centre. The sports facilities are less important than the transport and the accommodation. So if the links are designed to fulfil the long-term needs of better east/west public transport, and if the housing is of a quality that people want to live in, rather than just hostels for the games, then that will be great. It will slightly help rebalance the city towards the east, reinforcing the trend towards it becoming a three-centre agglomeration (West End, City and Canary Wharf plus docklands) instead of a two-and-a-half-centre one.
If, on the other hand, the stuff is built without thought for after the Games, then it will be the Dome times ten. You can waste a lot of money putting in the wrong infrastructure - but worse, you can waste a lot of potentially useful land. Money can be repaid; the land can be blighted for a generation.
That leads to the third matter, the intangibles. London is already, on many measures, the most international place on earth. This is not just a matter of people flying in. It is people living here and what they create. The largest non-national professional community in the world lives within or close to the M25. Foreigners visit Paris but live in London. So, London has no great need to "put itself on the map" in the way that Sydney and Barcelona very successfully did. It's already there. Indeed that's probably why it got the job: it offers the vibrancy and diversity that chimes in with the Olympic ideal.
The Olympic Games are the world's biggest media even. The question is whether we can use this event to position London so that it can bolt down this position of global leadership more securely. London is, and will remain, a high-cost producer of the goods and services it makes. Cities all over the world would love to have a chunk of its economy. Shanghai and Mumbai will inevitably capture a bit as the Chinese and Indian economies grow. New York and Paris, more traditional rivals, should never be under-estimated.
Building the right infrastructure is stage one. Doing a good Games is stage two. But we should be able to do both those, surely. Using the event to make London more secure in its world position - and hence increase still further its contribution to the UK economy - is the greatest opportunity and the toughest challenge of all.
Award for 'Independent' writer
The Independent's Hamish McRae has been awarded one of the most prestigious prizes in journalism.
McRae, Associate Editor of The Independent and the paper's chief economics commentator, won the David Watt Prize for his "outstanding contribution to the clarification of national, international and global political issues and the promotion of their greater understanding". An article by McRae on the economic successes of India and China published in The Independent in February last year was named winner from a shortlist at a ceremony in London yesterday. The jury highlighted for praise Mc Rae's incisive analysis of India and China's refusal to rely on aid for their economic growth, and the lessons that could hold for tackling poverty in Africa.
The David Watt prize was set up in memory of Watt, a journalist who spent five years as director of the Royal Institute of International Affairs (Chatham House).