Tuesday, September 18, 2012
Soccer and Public Economics
Tomorrow I start teaching the course (20 hours) on Public Economics at the UAB's Master in Economics and Business Administration. As last year, I will explain welfare economics, political economy, incentives in the public sector and behavioral economics. At the same time, I am teaching a course on the economics of soccer. Is there any relationship? I certainly have incentives to find any, because my cognitive abilities are limited. I guess they have in common that in both cases it is about finding both market failures and individual failures. It is also about externalities and how different institutions (leagues, governments) try to internalize them. Individual failures sometimes make government intervention more necessary, but in the case of soccer individual biases and anomalous behaviour just make the whole show more fun (think of those idiosincratic club officials, or those stupid sports journalists). And sometimes individual failure (inside government) make intervention or collective action more difficult. And then there is the whole issue of public investment in sports, for example building stadiums or organizing big sports events, clearly in general a case of governmental failure. Don't get me wrong, government failure does not mean that governments should not intervene in the economy, but that they should do better things (not spending lots of money in big sports events that in general have more costs than benefits).