How A Stronger Economy Can Help Your Team Win the World Cup

For four long years, U.S. soccer fans have been waiting for today, with the U.S. Men’s National Team kicking off their 2014 World Cup play against Ghana. Formal qualification for the tournament began three years ago, but countries have been preparing their

teams for this World Cup even longer than they realize. Many non-athletic factors can affect on-field performance; new research shows national teams from countries with free markets may have advantages over those without.

In Soccernomics, journalist Simon Kuper and sports economist Stefan Szymanski show robust causal relationships between a nation’s international soccer success and four factors: home-team advantage, historical soccer experience, GDP per capita, and population. Home-team advantage had the largest effect on an individual match, followed by historical soccer experience. GDP per capita and population had roughly the same effect on a soccer match between two given nations.

Home-team advantage and experience seem like fairly obvious elements of success, but what does GDP per capita have to do with soccer?

Kuper and Szymanski devote a whole chapter of their book to this issue, entitled “The Curse of Poverty: Why Poor Countries Are Poor at Sports.” The authors explain that athletes from poor countries are more likely to be shorter because of malnutrition, vulnerable to sickness, isolated from international networks that spread sporting information, and subject to the chaos of inadequate team administrators. For example, South Africa failed to qualify for the 2012 Africa Cup of Nations because no one properly explained to the team the tie-breaking rules for the standings.

Stronger economies are better at soccer because it takes substantial funding to sustain a professional league.  Players and coaches have to be paid, and teams bid for the best players.  Countries with poor economies simply cannot pay the wages required to get the stars.

Africa has every bit as strong a soccer tradition as Europe, yet Europe does much better at the World Cup. African economies have never been strong enough to fund consistent, well-organized professional leagues. All of the countries which have won the World Cup — Uruguay, Italy, Germany, Brazil, England, Argentina, France, and Spain —have high-level domestic leagues (or did at the time when they won). As a result, scores of players from these countries compete at the highest level. While many African players emigrate to Europe to play, most leagues are primarily based off of domestic players. African countries will not have the financial resources to develop high level leagues in the near future.

Federal governments can influence a nation’s GDP per capita. Two well-respected rankings of economic freedom analyze free-market public policies across more than 150 nations — the “Index of Economic Freedom,” developed by the Heritage Foundation in partnership with the Wall Street Journal, and the “Economic Freedom of the World Index,” developed by the Fraser Institute. The data show strong correlation between economic freedom and GDP per capita. Population actually has a slight negative correlation with economic freedom; for reasons economists have struggled to explain, wealthier people tend to have fewer children. When it comes to international soccer performance, a one-unit increase in economic freedom would create GDP per capita gains that would more than offset a corresponding loss in relative population.

The United States has the highest population of the countries playing in the 2014 World Cup, as well as the third-highest GDP per capita. It lags against most of the major European countries in historical soccer experience, but has a slight advantage over Portugal, one of its opponents in Group D.

Still, US GDP growth has failed to return to its pre-recession peak, and US economic freedom rankings have been slipping in both the Fraser and Heritage indices. As recently as 2000, America was ranked second by the Fraser Institute, but the most recent report ranks it 16th.  The Heritage rankings, meanwhile, saw the United States drop from 5th in 2005 to 12th in 2014.

Even with all the forecasting help from these data, the World Cup will still have unpredictable moments. “Experience, population, and income per capita explain just over a quarter of the variation in goal difference,” write Kuper and Szymanski. These three factors can give one team an advantage in a single match, but not guarantee victory. At the World Cup, teams need every advantage they can get. The richer economies that result from common-sense free-market policies can make the difference between going home after the first round and hoisting the World Cup on July 13.

Jason Russell is a research associate at Economics21 at the Manhattan Institute for Policy Research. You can follow him on Twitter here.

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