Saturday, March 25, 2023

Autocracies and Sports Governing Bodies

An article in The Economist during the World Cup in Qatar pointed out that autocracies were organizing more sports events recently than in the past. The summer and winter Olypimic Games in China, and the winter Olympic Games and the soccer World Cup in Russia, together with the last one in Qatar, are examples of the trend. The piece was based on an academic article in the American Political Science Review.

The reason of this increasing trend is probably that democracies are more reluctant to organize these events, because now there is a solid academic literature showing that the social costs outweigh the social benefits for the taxpayers of the host cities or countries. Freedom of speech in democracies makes it inevitable that this knowledge is communicated to the taxpaying public opinion, which does not happen in autocracies. Still, most of the host cities or countries are democracies.

It has to be said that this is a relatively recent phenomenon, as the academic literature questioning these events has emerged only in the last two or three decades. Barcelona in 1992, for example, could not have been influenced by this then non-existent literature. Since then, it has increasingly become an example of how the academic research can influence public debate.

The trend will most probably continue, because autocracies are complementary of unreformed sports governing bodies. The global governing bodies of sport (like FIFA or the IOC) are unregulated global monopolies that accummulate power because of the popularity of the competitions they own –the Olympic Games and the World Cup. This power is increasing because the popularity of these events is increasing. This power is prone to corruption, and it prefers the lack of accountability of autocracies rather than the light of democracies.

What can be done to attract more democracies? If the reason for their reluctance to bid for big events is that costs are too high, anything that could be done to reduce costs would be a good idea, like having a permanent venue or a few of them that rotate. More directly, democratic jurisdictions and multinational sponsors could threaten to withdraw their support unless the governing bodies introduce a condition to bid for these events: the respect of basic human risghts.

Although Qatar probably doesn’t regret having organized the last World Cup, the open debate about the lack of some basic human rights there is probably something that didn’t make their rulers happy.

Monday, March 20, 2023

Three years after the COVID-19 lockdown

Three years ago, the Spanish government took the decision to mandate a strict lockdown that kept us at home for six weeks. People like me had to get used to online classes and meetings, and our social life and connection to loved ones was severely restricted. Compared to what many others had to endure, I was very lucky.

In those days, there was huge uncertainty, which persisted for a long time. I will never forget the empty streets of Barcelona. Even after the strict lockdown, for many months ours was a sad town in the absence of visitors and tourists. My courses for foreign students on soccer and economics were suspended for more than one year. We didn’t know if we would emerge from the coma-induced economic crisis in a V-shape, L-shape, W, or what… Today we know that the recovery has been better than expected and things have basically gone back to normal... although more for some than for others, depending on whether you have lost loved ones, or whether you've been seriously affected by the disease. 

Still today, some of the discussions that we had at the moment have not been closed. If I understand well, it is not even clear whether it was a good idea to lock us down at home, or even to mandate wearing masks. Some months into the pandemic, we already had books about how everything had changed and would change even more. Some of the authors would like to hide some of the books now. I think that we will, and we must, keep studying about issues related to the pandemic for a long time. It is a great opportunity to use this natural experiment to patiently study lots of phenomena. More than one century later, there are still studies trying to understand the so-called Spanish flu of 1918.

What we do know is that public intervention and complementary social norms took center stage, and that politicians like Donald Trump who disregarded scientists and experts will be forever discredited. We also experienced a clear example about the interdependence of countries and governments and the importance of human cooperation at many levels.  We learned that there is no such thing as the absolute truth. Truth is provisional and subject to change, improvement and refinement, but that does not mean that it does not exist. It is precisely because of uncertainty that we must listen to scientists and not to demagogs. I honestly believe that the COVID-19 pandemic has contributed to stop the worse of populism, although there are still many survivors.

The pandemic has been a lesson about our vulnerability as species, and a call to be cautious about making predictions. The philosopher Yuval Noah Harari was discredited because he had said this in 2017:

 “So in the struggle against calamities such as AIDS and Ebola, scales are tipping in humanity’s favor. … It is therefore likely that major epidemics will continue to endanger humankind in the future only if humankind itself creates them, in the service of some ruthless ideology. The era when humankind stood helpless before natural epidemics is probably over. But we may come to miss it.”

He was wrong. Millions of people died, and today we can all agree that the pandemic was not created in “service of some ruthless ideology.” However, he together with other popular pundits continued to offer their supposed expertise by appearing on TV shows during the pandemic, as explained in this article in the magazine Current Affairs

The pandemic has taught us not only that public intervention was needed to stop the diffusion of the disease, deploy massive plans to protect the incomes of people, develop and massively administer vaccines, and to articulate massive investment funds (like the Next Generation program in Europe). It has also reminded us of the acute inequalities at the local and especially at the global level. And it has been a lesson in multidisciplinarity, as combining knowledge from science, humanities and politics has been crucial to understand what was happening and react to it.

Not having a clue about mathematics or statistics, and not even believing in their importance, has been very costly, as an article about the mathematical ignorance of British prime Minister Boris Johnson reveals.

I was very impressed by the ability of governments to mobilize resources for a common good. For example, I had never seen as graphical an application of the principle “to everyone according to their needs, from everyone according to their abilities” as with the administration of vaccines in Spain and the EU in general, where the ability to pay played absolutely no role. I was also very impressed in the fall of 2021 when I flew to Chile (a country usually associated to neo-liberal policies, then still with a right-wing government), to experience a very detailed and intrusive, but necessary and successful, plan to have all foreing visitors tested and monitored between their arrival and their departure. Or by the practical application of European integration with the development of a EU-wide Covid-19 certificate.

Still today, I know university graduates (not necessarily right wing ones) who have strong stances against vaccines. This has been a lesser problem in Spain compared to other countries, but it shows that there is still a lot to think about in terms of how to communicate science in uncertain contexts.

Saturday, March 18, 2023

Populism and corruption, for example in soccer

FIFA is the unregulated global monopoly that owns the World Cup and the rules of the most successful global sport. It has in place the structures that led in 2015 to the arrest of several officials as a result of an FBI investigation that concluded that they were part of organized crime.

The sportswashing World Cup in Qatar epitomized everything that is wrong with modern soccer, and also its invulnerability as a result of the fans’addiction (mine included) to keep watching it.

In my class on soccer and economics for foreign (mostly American) students in Barcelona, this week I was asked by a student to organize a discussion about the current allegations on FC Barcelona bribing referees. I happily accepted and sent them an article by journalist Sid Lowe in The Guardian. I also advised them to read the book by Simon Kuper on Barça and explained events since Kuper left it at the end of his book (with the re-election of the ultra-populist Laporta as president and the departure of Messi).

Populism and corruption usually go hand in hand. Populism was used to hide corruption in the US with Trump, and national-populism has been used in Catalonia to hide the corruption of sectors of the bourgeoisie (including those that typically preside the famous local soccer club). We could provide further examples from Italy, Argentina, France, Russia…

People connected to the club and more than one of its presidents in the last two decades have been closely connected to hubs of soccer or political corruption or sportswashing in Qatar, Brazil, Uzbekistan, the Emirates and Spain. The payment of more than 7 billion euros to the vice-president of the referees committe is just part of a familiar pattern. It was perfectly predictable that the club's president Joan Laporta would fight the allegations by saying that everything is an operation orchestrated by the enemies of the club. We'll see if this is a sufficient defense if the club is punished by losing points, the category, or not playing in the European competitions at a time where it has to finance the renovation of the stadium and remain competitive in the transfer market.

So far, fans keep watching and soccer does not seem to be suffering from a crisis of credibility as far as the audiences are concerned. In cycling, doping scandals did affect audiences and the sport is still recovering from the Armstrong scandal. That’s not happening to soccer, at least so far.

Meanwhile, FIFA’s World Cup in 2026 will have 16 more teams (up to 48), 40 more games (up to 104) and 10 days more: more money, and more incentives for corruption if nothing is done to deeply reform the structures of modern soccer.

Sunday, March 12, 2023

Soccer institutions, frozen in time

Last week, I discussed VAR with my students in the course I teach on soccer and economics. Although this new technology has increased the objectivity of decisions, it has not eliminated refereeing controversy at all. Some subjective decisions remain, and not only those that are not covered by VAR. Games are unnecessarily delayed or interrupted in a sport that has an appeal based on fluidity and fast pace. Some decisions, like calling hands or running or not to the screen, are still basically subject to discretionary interpretation and, since now they are supposed to rely on higher standards, they are even more controversial than before. In many cases, and as it happens in other sports, it would be helpful that referees or their assistants in the VAR room, explain their decisions in real time.

The lesson beyond sport is that there is some inconsistency in introducing disruptive technologies and pretending to keep the old instituions in place. In spite of the help of high quality videos, the governance of a soccer game is the same as before VAR (or before TV). In particular, there is an individual (the single referee) who has discretionary and final decision powers on penalty kicks, cards and the control of time. This power in a sport that depends on very narrow scores, coupled with the global expansion and commercialization of the business, is an invitation to fan pressure and in the extreme, bribing and corruption. My favourite team, FC Barcelona, is currently being investigated for alleged bribing of an executive in charge of refereeing in Spain. Although in my country refereeing has improved a lot since the times of overweight part-time referees, many games and even championships are decided by a referee mistake.

One of the most ridiculous features of the current VAR rules is the possibility, at their discretion, of refereees running to a screen in the margins of the pitch. Sometimes they have to cross the whole field and suffer the harrasment of fans, players and staff while they do that. Sometimes they decide to go, others they decide to rely (understandably) only on the opinion of the VAR room. That decision is not explained during or after the game. Also ridiculous is that the officials in the VAR room, also professional referees, at least in the Spanish league, are dressed like field referees, when they are in a presumably climatized office in Madrid, far away from the pitch.

It is also ridiculous that with all these technological possibilities around, the finishing time of the game is still controlled by the referee, who discretionally decides how many minutes (not seconds) to add to the official 90 minutes. This discretionary injury time should be replaced by the same centralized control of time that we see in basketball and handball. And most if not all of the decisions taken with VAR assistance should be taken in the VAR office and explained by the officials in that office, or by a robot. This would reduce the stakes of refereeing and also the incentives for corruption.

Institutions in soccer are frozen in time, decided in an era where there was not even television, governments were weak, and sport was not professional. Time for a change.


Sunday, March 5, 2023

The German model of industrial relations, in class

This week in class we discussed a recent Journal of Economic Perspectives article about the German model of industrial relations. Students had to prepare presentations relating the model to some contents of CORE's e-book "The Economy."

The article describes the strong role that labor unions play both in terms of sectoral bargaining at the regional and industrial level, and the role they play inside the firm, co-participating with owners in the decision-making of the organization. Although the model has eroded somehow in the recent past (forcing the federal government to play a more active redistributive role), it is still remarkable that the most powerful European economy departs so much from the classical model of the capitalist firm. Capitalist owners really share power with workers in the largest firms. Unlike worker cooperatives, the equity-holders remain owners, and are entitled to appropriate the profits, but the strategic decisions are shared with worker representatives. The model is respected across the political spectrum, and the article suggests that its success is related to the good results of the German economy in terms of employment, growth and productivity.

In class, we discussed these questions:

1) How does the German model fit with the definition of "capitalism" in Unit 1 of Core’s e-book "The Economy"? 

2) How does the model fit with the "Union voice effect" mentioned in Unit 9? 

3) Could it be applied in your country?

We concluded that the German model is a good example of the existence of varieties of capitalism. Although this economic system, characterized by combining firms, markets and private ownership, does not have a coherent alternative today, and it is dominant all over the world, it is compatible with variations, depending on the role of unions, government, democracy, etc.

The consensual German model facilitates the operation of the union voice effect, by which worker involvement reduces the cost of effort and increases productivity, preventing wage pressure from negatively affecting employment.

Although the model is singular of Germany and it only has some echoes in Nordic countries, there is nothing that prevents its expansion in other places. Social norms, or owners’ resistance, together with different productive structures, may explain why the model has not been expanded to more countries. However, the existence of German multinationals may result into subsidiaries that also have workers in supervisory boards (as it happens in Spain with Wolkswagen’s subsidiary Seat).