By Peter Apps, Political Risk Correspondent

LONDON, Sept 23 (Reuters) - India's Commonwealth Gamesdebacle shows the risk of such high profile sporting events --there are limited benefits if you get it right but a vastinvestment and political downside if it all goes wrong.

Indian officials would have hoped a successful games mighthave helped build on India's narrative as an emergingsuperpower, perhaps drawing comparisons to rival China's 2008Olympics. Instead, the Commonwealth Games -- due to start onOct. 2 -- have become a national embarrassment.

Several big-name athletes have already pulled out of thegames, while the Commonwealth Games Federation complain of a"filthy" athletes' village littered with rubbish and stray dogs.

Most seriously, a footbridge to the main stadium collapsed,injuring 27 workers -- inevitably highlighting India's widerinfrastructure problems and raising concerns about the qualityof new construction.

"India is suffering from a public relations disaster here inthat it looks less 'competent' than China," said NikolasGvosdev, professor of national security studies at the UnitedStates Naval War College in Rhode Island.

Organisers still say the problems are only minor glitchesand the games should be a success. But media coverage is clearlyinclining towards an overarching story looking at India's widerproblems from poverty to security.

Established investors might already be aware of thoseissues, but it will shape the expectations of others.

"It's quite probable the Commonwealth Games issue will feedinto existing negative perceptions on India's investmentenvironment," said Rebecca Jackson, analyst at political riskconsultancy Maplecroft.

The most successful games in terms of national branding havebeen those -- such as 2008 Beijing and 1988 Seoul Olympics, aswell South Africa's World Cup this year -- used as "coming outparties" for developing states, analysts say.

But a poorly conducted event can have the opposite effect --and even success can have its problems.

Organisers in Delhi have liked to point to the example ofthe 2004 Athens Olympics, which bounced back from global mediapredictions of failure. But the financial cost helped fuel thecurrent Greek debt crisis.

DEBATABLE VALUE

"There's always been a debate about this kind of event,"said Jonathan Wood, global issues analyst for London-basedconsultancy Control Risks. "They cost a lot of money --particularly on the infrastructure and security front -- and ithas never been entirely clear that they are worth it."

That might be a sobering thought for London -- where the2012 Olympic stadiums already tower over nearby housing -- andBrazil, due to hold both the 2014 World Cup and 2016 Olympics.

"These sporting events have become bloated behemoths, wherethere is little chance of achieving long-term benefit from theinitial investment," said Christopher Meyer, a veteran diplomatand former British ambassador to the United States.

"But there is little chance of reversing the trend."

Most observers agree South Africa's World Cup could havebeen a disaster. Had the naysayers being right and thetournament suffered from crime, power cuts and constructionfailures, South Africa's reputation might have sustainedlong-term damage affecting both investment and political clout.

But some wonder whether the money might have been betterspent in a country still suffering deep poverty and HIV/AIDS.

"If anything, South Africa got more out of the World Cupthan most countries hosting such sporting events," said RaziaKhan, chief African economist at Standard Chartered bank. "Itshowed they could host a real world class event. But theeconomic gains will probably still be less than many had hoped."

South Africa says it believes the tournament added 0.4percentage points to annual growth for 2010. The BeijingOlympics may actually have slowed the economy through thetemporary closure of factories to reduce pollution.

GOVERNMENTS DELUDING THEMSELVES?

A review this May in the British Medical Journal of 54studies written between 1976 and 2008 found "insufficientevidence" to show that they benefited, harmed or otherwiseaffected the health and economy of the host population.

"Governments invest a great deal of effort because theythink these events bring prestige," said the US Naval WarCollege's Gvosdev. "They delude themselves into thinking thatmassive state spending will produce a tourism boom -- eventhough it actually produces large amounts of debt that lag."

It's not that there are no benefits -- particularly for theimmediate local area. Barcelona helped build a reputation as acultural and tourist centre with its 1992 Olympics.

London's East End boroughs -- among its poorest -- willbenefit from new transport links regardless of whether 2012 is asuccess or failure that undermines the wider city's reputation.Hosting the games will cost some nine billion pounds ($13billion), providing it runs to budget.

For former Greek finance minister Stefanos Manos, lookingback on a widely praised Olympics but ruined economy, costmanagement is the key lesson.

"If you ask me with hindsight if we should have bid for theGames, my answer is yes," he told Reuters, citing the boost toGreece's national confidence and the impetus given to vitalinfrastructure building. "What wasn't good was the incrediblesloppiness and total absence of financial control. The Gamesaccelerated Greece's fiscal derailment."

(Additional reporting by Avril Ormsby in London and HarryPapachristou in Athens; Editing by Mark Heinrich)