Sunday, January 21, 2024

New ideas for the course on economics and soccer

One of the advantages of teaching about soccer and economics is that there are new things happening everyday, on the pitch, in the industry,… and in the offices and computers of researchers.

As I start a new edition of my course “Behavior and Incentives in Economics. The Case of Soccer” in the Study Abroad Program of the Autonomous University of Barcelona, I take advantage of three documents that contain new and very useful material:

-The IEB Report on Soccer and Economics published last year (which I coordinated) contains useful articles by Andrew Zimbalist on big Sports events, Thomas Peeters and Jan Van Ours on the role of managers, and Julio del Corral on the relationship between behavioral economics and Sports mechanism design (for example on penalty shoot-outs and the away goals rule). The piece on managers has a very useful example about how to compare managers that have a bad streak and are sacked in the middle of the season (like Ronald Koeman at FC Barcelona in 2021), with managers that experience a similarly bad streak and are not sacked (like Valverde in the same team a few years earlier): on average and in the particular example examined, there is not much of a difference, concluding that sacking the managers in the middle of the season does not have a causal effect on team performance.

-“Teaching Sports Economics and Using Sports to Teach Economics,” a book edited by Matheson and Fenn, is a very helpful teaching guide with very useful bibliographic references and teaching tips. I found especially useful the section on Women in sport, and advice on thinking about streaks and generating random sequences in class.

-“The Beautiful Dataset” is a new survey article by Ignacio Palacios-Huerta (author of the book “Beautiful Game Theory”) with an updated survey of mainly empirical literature on Sports, testing hypotheses from economics and related disciplines. The survey is very complete especially in those topics that Palacios-Huerta has researched himself, such as penalty kicks and referee bias. I learn from a footnote that in Hockey most penalties are not scored, meaning that if players believe that lagging behind in a penalty shoot-out places them at a significant psychological disadvantage, they should choose if they can to kick second. Meaning that if players can choose after the coin toss (as they can in soccer since the early 2000s), the order of kicking is not exogenous, which makes difficult to interpret in a causal way the results of research after that change in the rule (before the change, the order of kicking was exogenously decided by the coin, a point made by the only article I missed in the survey, by Kocher et al. -an article mentioned by Del Corral in the IEB report, that was recommended to me by Toni Ítal·lo de Moragas: thanks!).

These three documents overlap and leave gaps specific to soccer that I will try to fill in my course. The book on “Teaching Sports Economics…” is mainy about teaching and mainly uses examples from professional North American Sports leagues, although giving plenty of ideas and suggestions for soccer. Palacios-Huerta’s survey is mainly about how sports (and not only soccer) provide an ideal setting for field experiments, as the rules of contests are similar to the rules of experiments, and the protagonists are real professionals with high stakes (unlike subjects in lab experiments). Both the book and the survey have very useful material on the economics of discrimination in Sports, which is something I have been emphasizing (with a whole new chapter) in the last editions of my course. Also useful is material on managers: I learn that perhaps one can further compare managers that experience a similarly bad streak against teams of a similar quality, and not only experiences a bad streak against any team, and distinguish between sacking good and bad managers. The IEB report only digs deeper on three topics about soccer, meaning there is still a lot of work to do, for example on political economy topics, such as corruption and populism. With games every day and with researchers working at full steam, there is no shoratge of ideas to keep updating my course.

Saturday, January 6, 2024

Delors AND Spinelli. BOTH

For most of the around 150.000 years of existence of our animal species, until approximately 11.000 years ago, humans were organized in egalitarian bands of hunter-gatherers. Then with the Neolithic Revolution, property rights emerged and unequal societies developed, although the primitive agricultural techniques were not more productive than ancestral practices. For most of the next eleven centuries, living standards were quite homogeneous and stagnant around the world, until there was a phase transition starting in Britain with the Industrial Revolution, that saw productivity dramatically and heterogeneously increase (this narrative will sound familiar to any reader of Samuel Bowles and CORE’s The Economy).

Just before the era of the Industrial Revolution, there was a rich diversity of political organizational forms. Five hundred years ago, the Italian Peninsula was home to hundreds of sovereign entitites, but along with city-states, there were also leagues of cities, empires and hybrid alliances. Democratic forms with varying territorial structures, based on elections or sortition, had been tried in many jurisdictions, from classical Athens, to Venice, to India and Africa. Then, together with the expansion of capitalism, this economic system found an almost perfect complement in the nation-state, which provided allegiance to the provision of public goods (waging war, speaking national languages) and coercive systems that facilitated the expansion of markets and the protection of property rights, as we know from Ernest Gellner.

The nation-state, like the Neolithic Revolution some centuries earlier, emerged not because it was more efficient, but because it complemented well the objectives of elites. The fragmentation of empires and the end of colonialism was used (sometimes by elites coming from Europe, as in the American continent) to export the nation-state formula all over the world. There were roads that could have been taken (there were failed attempts or projects) but were not, like large federal structures in Central and South America or Africa or Israel/Palestine. Large federations only succeeded, however, in North America and the Indian subcontinent (perhaps we can add Australia and Brazil).

After the tragedies of the two World Wars, both born in Europe, there have been projects to create political organizations that went beyond the nation-state formula. The most successful one is the European Union. Its gradual evolution towards a federation is, according to the Spanish writer Javier Cercas in Le Grand Continent, the only reasonable utopia of our times.

After the fall of the Berlin Wall, we were probably too optimistic that globalization would make nationalism obsolete and that the march towards federalism would be fast and unproblematic. The global financial crisis and the imbalances created by globalization and technological change have made things much more difficult, and have probably facilitated the emergence of dangerous ultra national-populists that today threaten democracy.

The European utopia is already true in part, however, because of a combination of collective action, evolutionary forces and leadership. These days, we celebrate the life and achievements of one of the greatest European leaders, Jacques Delors. He pushed the ideal of the European federation through practical steps like the Single Market, the Erasmus Program or the Cohesion Funds. In the obituaries that have been written these days, some have opposed the practical and step by step federalism of Delors to the ideological federalism of Altiero Spinelli, the Italian politician that co-wrote the Ventotene Manifesto. True, Delors was not a dogmatic federalist, and Spinelli was not a man of government. But the two of them complement each other very well, and we need the memory of both to fight the sovereignist national-populism of our days, with practical feasible proposals and with an emotional narrative that can galvanize the public opinion.

 “A federation of nation states” was a proposal of Delors that has been interpreted by some as an oxymoron. I interpret it as a way to make it easier to digest that the world of nation states has to evolve, that it is already evolving, at least in Europe, towards a world where currencies, parliaments and armies can be shared, and borders can disappear. Other quotes of Delors clarify that he was not at all far away from Spinelli. He also said that "Politicians who attack the dream of a federal Europe are racist bigots intent on undermining the Continent's freedom and peace", and that "Federalism is a guideline, not a pornographic word, you can speak it out loud...We have been focusing too much on a country that has said no, no, no!"

We can call them states, but if things go well, they will be very different from the all powerful nation-states that still prevail in the indoctrination and imagination of many people. They will be at some point States In Name Only (SINO), like Brexit will become Brexit in Name Only (BINO) because the UK will progressively get closer again to the Single Market and the Customs Union. And like the two state solution in Israel/Palestine will only be functional if the two “states” share several key collective goods, and cooperate in the creation of a polity with equal individual rights instead of transforming the current disfunctional wall into an internationallly recognized frontier (like modern both Jewish and Palestinian pacifists defend).

We need to move from an either/or mentality to a both/and mentality, as argued by the Jewish Scholar Noam Pianko in “Zionism. The Roads Not Taken” (Indiana University Press, 2010). We need to celebrate BOTH the memory of Jacques Delors AND of Altiero Spinelli.