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GLOBALIZATION AND GOALS: Does soccer show the way?

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  • Branko Milnaovic

Abstract

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.

Suggested Citation

  • Branko Milnaovic, 2003. "GLOBALIZATION AND GOALS: Does soccer show the way?," Labor and Demography 0312001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpla:0312001
    Note: Type of Document - pdf; prepared on Windows; pages: 19; figures: 3
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    References listed on IDEAS

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    1. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
    2. Feess, Eberhard & Muehlheusser, Gerd, 2003. "Transfer fee regulations in European football," European Economic Review, Elsevier, vol. 47(4), pages 645-668, August.
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    1. More on soccer economics
      by Dani Rodrik in Dani Rodrik's weblog on 2007-10-31 18:02:44

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    Cited by:

    1. Dirk G. Baur & Sibylle Lehmann, 2007. "Does the Mobility of Football Players Influence the Success of the National Team?," The Institute for International Integration Studies Discussion Paper Series iiisdp217, IIIS.

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    More about this item

    Keywords

    globalization; soccer; labor;
    All these keywords.

    JEL classification:

    • J - Labor and Demographic Economics

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