Soccer as a window on globalization

Do you want to understand how globalization reshapes wealth and opportunity in the world? Look no further than soccer--the sport that everyone in the world (besides the U.S.) calls football. I know, this is not an original idea. There is at least one best seller on the topic, but while it is a readable one it barely scratches the surface of the interesting issues.

Look in particular at how the globalization of the soccer industry has shaped the African landscape. While Africa always produced individual star players, the loosening of the restrictions on the numbers of foreign players in European leagues had a tremendous impact on the number of African players making the move North. So dominant are African players that the BBC's web site even maintains a page devoted to them alone. It is no exaggeration to say that Europe's soccer scene would not be half as exciting without African players such as the strikers Drogba (of Chelsea) and Eto'o (of Barcelona).

So it is beyond question that the globalization of the industry has increased the quality of play for the top clubs, and presumably has increased the enjoyment of their fans. It is also not in doubt that it has increased the earnings of the best African players and widened the income gap between them and their compatriots back home.

But there are also other interesting questions to which I would love to have answers.

Consider that soccer fans have loyalties not only towards individual clubs but also to their national teams. So one question is what has the presence of foreign players in Europe done to the quality of the national teams. Following the disappointments of the English national team in recent games, some have suggested that the culprit is the dominance of foreign players in the Premier League and have recommended reintroducing quotas.

Or consider the quality of domestic leagues in Africa proper. The complaint that the exodus of players has hurt these leagues has been around since the 1970s. But I do not know of any serious evidence on this, and I would love to know.

In any case, it is likely that the globalization of the industry has (a) increased the quality of African national teams relative to European national teams; and (b) reduced the quality of domestic leagues in African leagues relative to club play in Europe. So how do we evaluate these outcomes in terms of what ultimately counts: the enjoyment of the fans?

And one final question that follows from the previous paragraph: have Africans become more nationalist in sports and Europeans less so as a result of these relative changes in the quality of club versus national teams?   

And while we are on sports, can someone explain to me why Americans call their national baseball championship the World Series? Did I miss all the Japanese and European teams that were eliminated in earlier rounds?

Comments

[Minivet]

World Series: apparently, the explanation is that when it started, in the 1890's, there was no professional baseball outside the US and Canada; since then, the name stuck.

[R]

I think that the winner of the NBA Championship during the awarding ceremony after the final game is also called "World Champion".

[alexandre delaigue]

You will then probably appreciate this paper by branko milanovic :

http://ideas.repec.org/p/wpa/wuwpla/0312001.html

Soccer (football in the non-American terminology) is the most globalized sport. Free circulation of players has markedly increased during the last ten to fifteen years as limits on the number of foreign players in the European leagues have been lifted, and clubs have become more commercially-minded. On the other hand, the rules governing national team competition have remained restrictive: players can play only for the country where they were born. We show that, in a model where there is free circulation of labor, increasing returns to scale, and endogeneity of skills, this produces on the one hand, higher overall quality of the game and increasing inequality of results among clubs, and on the other hand, lower inequality in the national teams’ performances. The empirical examples from the history of the European Champions’ League and the World Cup support the implications of the model. We argue in the conclusions, that soccer’s global rules allow poor countries to capture some of their “leg drain”, that is the improved skills which their players have acquired playing for better foreign clubs. This provides an example as how forces of efficiency but also inequality unleashed by globalization can be harnessed by the existence of global institutions to help improve the outcome for the poor countries.

[Makoto]

> the sport that everyone in the world (besides the U.S.)

Japanese also call it soccer, though the word "football" has gained popularity. I used to wonder why we are following America about this. Maybe because of Japan's defeat in WW2?

> can someone explain to me why Americans call their national baseball championship the World Series?

MLB "World series" is being aired in Japan. The word pricks Japanese nationalistic feeling. But most of time, we accept the word, thinking it is the American way of word choice.

[Random African]

a few things:

Drogba, contrary to Eto'o, didn't move to Europe to play soccer, he moved to France when he was five.
And when one discusses national teams, especially African national teams, that's a case that needs mentionning. There are more and more players who after growing up or being born in Europe choose to play with their african national team.. Senegal during World Cup 2002 was half "frenchies", guys like Kanouté or Liverpool's Cissoko never lived in Mali but are the stars of the national team. Trinidad & Tobago had a few of them too, Morocco, Algeria has had them for long.

That phenomenon doesn't have much to do with the gloabalization of the industry.

As far as the decline of non-european leagues, well, the case is far more easy to make for Latin America where you could easily find data on stadium attendances (they're the lowest ever).
Another way to look at the evidence would be to look at the age of the stars players. The trend there suggests that latin american are leaving younger and younger, and Africans ? They're transferred to european academies (Eto'o to Real when he was 15). It's worth noting that the academy business is flourishing on the continent. In the 70's we lost our star players when they became star player, no when someone thought they had a chance to may be one day in the future become a star player.
Now did the quality of the play get lower ? Well, yes, otherwise tunisian, morocan and egyptian clubs wouldn't dominate the continental competition (their position reminds me of Turkey or Mexico where clubs can keep their players more easily than in, say, Brazil because of a lower demand AND can afford to import talent because of strong local fan bases).

And I don't think globalization had any effect on our nationalism which a huge topic by itself (soccer nationalism).

And not all soccer fans have dual loyalties. There are some studies out there that show that England National Team fans tend to be smaller club fans, or no-club fans while big club fans barely care about national teams performance. Quite the same in Italy and even worse in Spain or Portugal.
So the fans of the clubs who have benefited from globalization don't suffer from their country's low performance.

I could go on for days on this topic..

[John Orford]

1) globalisation has made the English national team better! -- it's just that it's also evened the playing field, and made non-big-league-nations more competitive too.

2) the domestic African leagues are still rife with corruption as they always have been. So even if there was little "defection" to European leagues, African players would have little chance to develop into top pros.

[Random African]

"On the other hand, the rules governing national team competition have remained restrictive: players can play only for the country where they were born."

Please.. That sport invented the convinient naturalization !
The only real restriction is the unability to play for another national team once you played for one (and in the past, some clubs have used it for their advantage too). However since 2002, caps with youth national teams aren't irreversible anymore.
(i just read the paper and it does mention it)

As for the empirical evidence for lower inequality in World Cups, I fail to see the evidence that it's caused by higher club mobility. The biggest gains were done before the increased mobility period and probably have a different causality.
And as far as the recent lower world cup unequality, there are factors at work like longer club seasons that make players that are used in their clubs tired when they get to the World Cups (or Euros) and benchmen nations can outperform them (like Greece in 2004). And the fact that players are still discovered at world cups suggests that their WC performance predates their club ones. We could also mention that low export nations like 2002 Turkey, 1994 Bulgaria and Romania (or 1986 USSR) make the most of the "new nation reaching the top 8.

nice models though.

[Random African]

John Orford,

England has never been all that good. I mean we're talking about a nation that invented the game, spread it around the world, created professionalism and yet only won one world cup (AT HOME) and reached the top 4 twice.
So the evidence for England performing worse is weak.

And evening the field for non-big leagues countries ? Spain is even worse than England. Portugal got better when its league got worse. The Netherlands have always been good. French players starting to leave after they got better, not before. Romania, Ukraine, Yougoslavia, the Czech Republic performed better and then their players moved to big leagues.
Only Italy and Germany really ever were big leagues and big countries.

ok i need to stop. this is an economics blog, lol.

[Luis Enrique]

Well I thought I knew the answer to that one (it was originally sponsored by the New York World newspaper) but according to Snopes, I've swallowed a myth:

http://www.snopes.com/business/names/worldseries.asp

[Luis Enrique]

Oh, and Chris Dillow has some thoughts on the foreign players hurting the domestic game argument:

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2007/09/brookings-wrong.html

[Rob]

This is a huge deal in England at the moment. It is argued (unconvincingly in my opinion) that the English national team is damaged because so many top domestic players are excluded from domestic club teams because of the presence of "foreign" players. However, it (subjectively) seems to me that, excluding one World Cup win in 1966, the English team is much better now than it was in the 1970s when there were few foreigners (if we exclude the Scots and Irish and Welsh). I would argue that the best domestic players now have to compete with the best in the world at a every early stage and get better. This is an debate that mirrors that of the protection of domestic industry. Do read the Chris Dillow post that is mentioned in the comment above.

[MJ]

See a World Bank video of the Milanovi paper;
http://bayesianheresy.blogspot.com/2007/10/yes-soccer-is-window-on-globalization.html

[Random African]

"I would argue that the best domestic players now have to compete with the best in the world at a every early stage and get better."

Not necessarily. I'd argue that english players cannot get at the level of say french players because french clubs (and the federation) spend a lot more ressources in scouting and trainning french talent. English teams can and do use all of their ressources in attracting the best players because they don't scout or train local talent.

[Lucas Reis]

I live in Brazil, and it is very disappointing to see our best players going very early to europe teams.

In the middle of our national cup there is what they call "window", like two weeks between one round and the other. Almost all of our best players are bought in the "window" break. As I said, its very disappointing to see your club losing his best player in the middle of the championship!

[Random African]

So how do we evaluate these outcomes in terms of what ultimately counts: the enjoyment of the fans?

Well it's complicated. More people watch more games with good players more often. So one could easily argue that, yes, the fans benefitted.

But then there are objections.
- Fanhood is often loyalty and it's not easy to switch loyalties, so the fans of teams who got hurt by globalization definetly get worse games with worse players.
- For non-loyal fans, one shouldn't underestimate how important uncertainity is. Unequality reduces uncertainity and therefore reduces enjoyment. The Champion's League has switched to a formula that includes more play-off games for that very reason. The super safe, round robin after round robin formula were very popular with the big clubs as they reduced uncertainity but raitings were declining.

The perfect balance would high inequality with high uncertainity. There's nothing as fun as watching millionaire teams with all the talent in the world getting beat by potentially inferior squads... if it doesn't happen too often, lol.

[Jack]

Development of young players in France is much better thab in England but it is not simply due to resources allocated. English clubs have as much incentive and more money to develop young players in general and British ones in particular. There seem to be three failings of the UK system. There is no UK equivalent of the national academy at Fontainebleu, large clubs have greatly restricted cachement areas for developing young players and there is excessive concentration on early results which favours size and strength over skill. The English youth teams outperform their senior counterparts.

A good English player is worth more to an English club than an otherwise equal non-English player so the incentives to find them are strong.

The best teams are better than most national teams, better organised, better teamwork, better management and better players. In addition a national team may include many rivals so only blind nationalism can lead you to support a team that doesn't play football as good as you are used to and which includes players you normally hope will fail so I second Random African on that point.

[Random African]

Jack,

Given that devellopment involves lots of risk, as you get at best 1 very good player and 3 or 4 ok ones per 20 guys promotion, I think that a club with strong financial ressources has less incentive. English clubs like Arsenal and ManU and Liverpool can and do invest money in snatching players from clubs who invest in devellopement. Arsenal does it earlier than most and is able to get them at lower prices because they're willing to take that risk.

England could involve in a system like Italy where bigger clubs build a client relationship with smaller ones and basically outsource devellopment, but with even smaller english clubs getting bigger recrutment budgets, that seems unlikely.
In Spain, regionalism is the big incentive for investing in devellopment. Fans want their teams to have at least some local talent. That is why Barça runs one of the best farming systems even if they can afford to simply outbid most.
In France or Holland, they simply don't have the choice, it's devellop or die. And they may have legal obligations too, actually.

Basically, it all boils down to scarcity of ressources. Recently, someone in Real Madrid's management admitted that a few years ago, they decided to pass on Cristiano Ronaldo, Messi, Dos Santos and Pepe (that they bought €30 millions last year) because all the ressources went to the galactic senior team and devellopment wasn't a priority.

[Aqdas Afzal (Pakistan)]

Dani--

I think you have rasied interesting questions:

Allow me to try to answer these by bringing evidence from another sport, though hardly as globalized as soccer: cricket.

Currently circket is played on all continents of the world except Latin America and there is a tradition of having the cricket World Cup since the 1970s.

a)There is a vibrant league system in England (called county cricket) for which players from the Caribbean and South Asia have been leaving for since the 1930s.

Moreover, the Australian domestic cricket league also attracts the second-best from around the world.

Ever since foreign players started participating in English county cricket in significant numbers the quality and results of foreign teams have become better. Though cricket is, without doubt, an English sport, England has never won the World Cup, whereas India, Pakistan and Sri-Lanka have.

I think playing in the English county cricket definitely hones the skills of the foreign players and then when these guys come back they impart some of that knowledge to their local colleagues. In other words, there are some positive externalities (for foreign teams) associated with foreign players' playing the English county cricket.

b) I do think that the quality of the local clubs has gone down as well. This is especially true in Pakistan where there wasn't much in the way of domestic cricket to begin with. The primary reason for this was that in the local scene we don't have teams representing Karachi or Lahore. Instead, there are teams representing the Pakistan Railways and the National Bank, which provide players with comfortable sinecures.

Still, the quality of local criket has gone down as there is hardly any interest in these matches.

c)As for how to measure the enjoyment of the fans, I think, a good proxy would be i) stadium attendance stubs and ii)an index of advertisement money flowing into the sport over the years and then one could bifurcate between international and local matches.

[Tim Worstall]

"It is also not in doubt that it has increased the earnings of the best African players and widened the income gap between them and their compatriots back home."

A point I've tried to make before. Globalisation increases income inequality by allowing the exports of the services of those who can compete on the global stage.

[Martin]

I think it would be hard to collect data on this (if one wanted to do empirical research) for Africa, but Latin America would probably make a better case study given their national leagues are (and were) much more developed. It would be interesting for example to study the relative development of the price of TV rights in Europe and Latin America, and see whether for example the change in quota rules had any big impact on the ratio of the two.

[philip lane]

in relation to globalisation and football, see

Does the Mobility of Football Players Influence the Success of the National Team?
Dirk G. Baur and Sibylle Lehmann

IIIS Discussion Paper No. 217
Abstract

This paper is motivated by the observation that there is a large discrepancy among football nations regarding the number of football players that play in the national team and also in their home league. Two extreme examples are Argentina and Italy : Almost all members of the national team of Argentina play in a foreign football league and all national team players of Italy play in their home league. We focus on the question whether a country's success in international competitions significantly depends on the mobility of its football players. More specifically, we analyze whether a country's success is influenced (i) by the number of national team players that do not play in the home league and (ii) by the number of national team players from other countries that play in the home league. Our study is based on data of all 32 national football teams qualified for the FIFA World Cup in Germany 2006 including more than 700 players with a total estimated market value of almost four billion Euros. The main finding is that a country's success crucially depends on both imports and exports. This suggests that all countries that qualified for the World Cup gain from trade.

Keywords : Football, International Trade, Transfer market

JEL classification : F13, F16, L80

http://www.tcd.ie/iiis/pages/publications/

discussionpapers/IIISDP217.php

[philip lane]

in relation to globalisation and football, see

Does the Mobility of Football Players Influence the Success of the National Team?
Dirk G. Baur and Sibylle Lehmann

IIIS Discussion Paper No. 217
Abstract

This paper is motivated by the observation that there is a large discrepancy among football nations regarding the number of football players that play in the national team and also in their home league. Two extreme examples are Argentina and Italy : Almost all members of the national team of Argentina play in a foreign football league and all national team players of Italy play in their home league. We focus on the question whether a country's success in international competitions significantly depends on the mobility of its football players. More specifically, we analyze whether a country's success is influenced (i) by the number of national team players that do not play in the home league and (ii) by the number of national team players from other countries that play in the home league. Our study is based on data of all 32 national football teams qualified for the FIFA World Cup in Germany 2006 including more than 700 players with a total estimated market value of almost four billion Euros. The main finding is that a country's success crucially depends on both imports and exports. This suggests that all countries that qualified for the World Cup gain from trade.

Keywords : Football, International Trade, Transfer market

JEL classification : F13, F16, L80

http://www.tcd.ie/iiis/pages/publications/

discussionpapers/IIISDP217.php

[Jakarta Casual]

a couple of points. here in indonesia foreign players like christian gonzalez undoubtedly raise the standard of the game. sad to say for every gonzalez there are about 10 carlos kickaball who are crap

in scotland till a few years back there were too many foerigners who were also crap and being well paid for their lack of skill. tv money dried up, the hookers left and now more local players are getting a game. one result of this is the national team are performing better than they have done in many years

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[stagell]

The phenomenon you pointed out is very general, and can be found not only in the European/African football relation but also within European football. Globalisation in football, as with real goods, is first and foremost a regional phenomenon ! France is enjoying, for instance, the same process as Africa as a whole : a better national team (first victory in the world cup in 98, final in 06), and a worse national championship, as the best french players plays abroad (where they improve their skills).

[Max]

Hi Dani,
There is a theme that you haven't notice, maybe because you are not in a country fulled with soccer fanatics.
With cable and satellite, european leagues are in such high levels, that it substitutes national soccer leagues because it is not as good. People nowadays talk about european teams like they were fans, even though they play 10 thousand miles away.
There is something that came to my mind with this soccer issue: barriers of entrance to cable channels like fox sports and scale economies from the european leagues. Maybe it is a viscous circle that has been impulsed by globalization.

[Anthony Damiani]

The World Series is so-called because it is a very old, continuous event. When first instituted in 1892 (or 1902, in its modern National League vs American League incarnation), the sport was played almost exclusively in the US, and transport was much more difficult. At the time, it might not have been unreasonable to consider the winning team the best in the world. By the time this was no longer true, the event itself had been around for decades and had become an institution.

It will be interesting to see if the World Baseball Classic (instituted in 2005, scheduled for every four years) does eventually grow into a true global championship.

The phenomenon of the US as an isolated sport community is not confined to baseball, and probably relates largely to the existence of the Atlantic and the Pacific, the size and population of the country (which makes it a viable market onto itself), and the linguistic and economic differences with our only large neighbor (some American leagues have Canadian teams, but none have any from Mexico).

[Brian]

Really interesting post, and a lot of thought-provoking comments. I've addressed Dani's post and some of the succeeding points from the perpective of a soccer fan on my soccer blog, The Run of Play (http://www.runofplay.com). Briefly, I argue that there are a number of inhibiting factors that make watching a high-quality foreign league an imperfect substitute for watching a domestic league. But I agree with Josh Patashnik on The Plank that European investment in the African game has raised the quality of the African domestic leagues in absolute terms, so that the situation, while still ambiguous in some ways, may turn out to be a win-win for soccer fans.

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