World Development 184 (2024) 106753 0305-750X/© 2024 Elsevier Ltd. All rights are reserved, including those for text and data mining, AI training, and similar technologies. Regular Research Article Domestic policy consequences of international mega-events: Evidence from China Xiao Ma a, * , Jialei Ma b a School of Government, Institute of National Governance Studies, and Institute of Public Governance, Peking University, PR China b School of Government, Peking University, PR China ARTICLE INFO Keywords: Mega-events Intergovernmental bargaining Policy process Chinese cities Subways ABSTRACT 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 bureau- crats’ 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. 1. Introduction International mega-events such as the Olympic Games, the World Cup, the World Expos, and the G20 Summit have significant conse- quences for their host countries. They help attract investment and tourists (e.g., Horne, 2007; Hayduk & Rewilak, 2021; Fourie & Santana- Gallego, 2011, 2022), drive the development of new urban areas and the redevelopment of existing ones (e.g., Zhang & Wu, 2008; Wu, Li, & Lin, 2016; Lauermann, 2019), improve the host country’s image (e.g., Deng, 2008; Bachrach, 2000; Martin, 2004; Tomlinson & Young, 2006; Bran- cati & Wohlforth, 2021; Kobierecki & Stro ˙ zek, 2021), and enhance its soft power (e.g., Horne & Manzenreiter, 2006; Grix & Lee, 2013). These benefits, however, sometimes come with a steep price and various governance problems (e.g., Cha, 2008; Lauermann, 2019; Scharpf, Gl¨ aßel, & Edwards, 2022). For instance, they create opportunities for corruption (e.g., Matheson et al., 2018; Olmos et al., 2020) and cause prolonged disruption of the daily lives of local residents (e.g., Müller, 2015). A primary concern for the hosts of mega-events is the rising associated costs (e.g., Müller, 2017; Matheson, 2019; Lauermann, 2022). The 2014 Winter Olympics in Sochi, for example, cost a whop- ping 55 billion in US dollars, more than two percent of the country’s gross domestic product (GDP), yielding limited returns but leaving Russia with a continued burden of debt and maintenance (Müller, 2014). The Vietnamese government cited cost as a primary concern when it withdrew from hosting the 2019 Asian Games. 1 While mega-events seem to be losing their appeal in many parts of the world (e.g., Matheson 2019; Lauermann, 2022), China has emerged as a leading host country of mega-events in recent decades. Over 60 international sports, cultural, economic, and political mega-events took place in various Chinese cities since 2001. Despite the pessimistic outlook on financial returns, Chinese cities remain enthusiastic about competing to host such events. The northern city of Harbin, for example, has bid to host the Winter Olympic Games twice. Its applications did not even pass the screening by China’s own Olympic Commission, which had deemed the city financially and logistically incapable to host the Olympic Games. 2 Scholars and others generally dismiss the Asian Games * Corresponding author. E-mail address: x.m@pku.edu.cn (X. Ma). 1 https://www.reuters.com/article/us-games-asia-vietnam-idUSBREA3G18H20140417, last access July 26, 2023. 2 https://hebei.hebnews.cn/2013–11/06/content_3587670_2.htm, in Chinese, last access July 26, 2023. Contents lists available at ScienceDirect World Development journal homepage: www.elsevier.com/locate/worlddev https://doi.org/10.1016/j.worlddev.2024.106753 Accepted 2 August 2024