10-05-081government decentralization and athletic incentives government decentralization and...

10-05-08 1Government decentralization and athletic incentives

Government decentralization and athletic incentives: the case of former

communist countries

Caroline ButsBruno Heyndels

IASE 10th Annual Conference

(May 9-10, 2008)

10-05-08 2Government decentralization and athletic incentives Pag.

Theory on the determinants of sports success


Sports success differs among countries

Depends on:

Economic, demographic, political, climatic,… conditions (Ball, 1972, Bernard and Busse 2004, Levine 1973, Lui and Suen 2007 and Moosa and Smith, 2004)

Most important: GDP and population

Present paper: Does government (de) centralization have an impact?

Case study: former communist countries


Decentralization and sports success

Decentralization creates incentives for:

-Private actors identification

-Public actors prestige, reelection

Reason: decentralization results in competition


Theory on government competition


Theory on government competition

Mobility-based government competition :

Providing public goods Tiebout (1956)

Tax competition Wilson (1986)

Cultural competition Elias (1991), Frey (1999)Baumol and Baumol (1994)

Non-mobility based government competition :

Yardstick competition Neighbouring policy as reference


Cultural competition

- Habsburg Empire 17th and 18th centuries high number of famous composers (Elias, 1991, p.24)

- Renaissance London high number of professional playwrights (Baumol and Baumol, 1994, p.182)

- Federal or decentralized structure fosters artistic creativity (Frey, 1999, p.71)

Competition among governments could have a similar effect on sports performances


Government competition and sports performances

Decentralization of a state may cause competition among governments, each one wanting to have the best athletes

These investments will positively affect athletic performance

Athletics performances of former-communist countries Decentralization as brake up or unification of a nation

This competition will increase investment in top level sports


Data and results


Data

- Athletics top 100 year lists (ATFS) calculation of market shares

- Advantage over Olympic medals: no bias due to quota’s

- 1980, 1984, 1988, 1992, 1996, 2000, 2004 and 2006

- Only Olympic disciplines

- 32 000 observations


Countries

Three groups :

- Decentralization: Czechoslovakia, Yugoslavia, Soviet Union

- Centralization: Germany

- No such changes: Albania, Bulgaria, Hungary, Poland and Romania


Hypothesis

Decentralized former communist countries have better athleticsperformances than countries without such a change

Centralized former communist countries perform less than countries without such a change

Keeping in mind:

- Downward trend due to brake up of communism- Other determinants of sports success


Evolution market shares: all Eastern European and Soviet countries

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

1980 1984 1988 1992 1996 2000 2004 2006

Evo

luti

on

of

mar

ket

shar

e

(Gärtner, 1989, Shughart and Tollison, 1993 )


Evolution of market shares of country group: no change 1980=100

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

1980 1984 1988 1992 1996 2000 2004 2006

Evolu

tion

of

ma

rket

share

s

No change


Evolution of market shares of country group: decentralization 1980=100

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

1980 1984 1988 1992 1996 2000 2004 2006

Evolu

tion o

f m

ark

et

share

s

No change

Decentralization


Evolution of market shares of country groups 1980=100

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

1980 1984 1988 1992 1996 2000 2004 2006

Evolu

tion o

f m

ark

et

share

s

Decentralization

Centralization

No I nstitutionalchange


Evolution of market shares of country groups 1988=100

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

1988 1992 1996 2000 2004 2006

Evolu

tion o

f m

ark

et

share

s

Decentralization

Centralization

No institutionalchange


Conclusion

Graphs seem to confirm the hypothesis!

To do:

- control for other variables regression analysis: panel - all countries general conclusion federal vs.

central


Thank you for your attention!


Annex : Former Soviet Union

0.00

5.00

10.00

15.00

20.00

25.00

30.00

1980 1984 1988 1992 1996 2000 2004 2006

Year

% i

n a

thle

tics

top 1

00


Former Czechoslovakia and former Yugoslavia

0.00

0.50

1.00

1.50

2.00

2.50

1980 1984 1988 1992 1996 2000 2004 2006

Year

Evolu

tion o

f m

ark

et

share

s

Czechoslovakia

Yugoslavia


Germany

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

1980 1984 1988 1992 1996 2000 2004 2006

Year

% i

n a

thle

tics

top 1

00

Germany

East Germany

West Germany


No (de)centralization

0

0.5

1

1.5

2

2.5

3

3.5

4

1980 1984 1988 1992 1996 2000 2004 2006

Year

% i

n a

thle

tics

to

p h

un

dre

d

Albania

Bulgaria

Hungary

Poland

Romania


References


References

• ATFS, 1997, Athletics 1997 The International Track and Field Annual, Cheltenham, Sportsbooks.

• ATFS, 1993, Athletics 1993 The International Track and Field Annual, London, Harmsworth Active.

• ATFS, 1989, Athletics 1989, The International Track and Field Annual, Cheltenham, Sportbooks.



• Allison L., 1986, The Politics of sport. Manchester, Manchester University Press. • Andreff W. and Szymanski S., 2006, Handbook on the economics of sport. Northampton,

Edward Elgar Publishing. • Ball D.W., 1972, Olympic Games competition: Structural Correlates of national success.

International Journal of Comparative Sociology, vol. 13, p. 186-200. • Baumol H. and Baumol W.J., 1994, On the economics of musical composition in Mozart’s

Vienna. Journal of cultural economics, vol. 18, p. 171-198.


References

• Bernard A.B. and Busse M.R., 2004, Who wins the Olympic Games: Economic Resources and medal totals. Review of Economics and Statistics, vol. 86, p. 413-417.

• Chew Ging L., Hoffman R. and Ramasamy B., 2002, Public Policy and Olympic success. Applied Economics Letters, vol. 9, p. 545-548.

• Dunning E., Maguire J. and Pearton R., 1993, The Sports Process. Windsor, Human Kinetics Publishers.

• Du Bois C. and Heyndels B., 2007, The more the better: Internationalization, competitiveness and performance in Athletics (1984-2006).

• Elias N., 1991, Mozart: De sociologie van een genie. Amsterdam, Van Gennep. • Frey B., 1999, State Support and Creativity in the Arts: Some New Considerations. Journal

of Cultural Economics, vol. 23, p. 71-85. • Gärtner M., 1989, Socialist Countries’ Sporting Success before Perestroika-and after?

International review for the sociology of sport, vol. 24, p. 283-297. • Houlihan B., 2005, Public sector sport policy. International Review for the Sociology of

Sport, vol. 40, p. 163-185. • IAAF, International Association of Athletics Federation, Top Lists, Online: <http://

www.iaaf.org/statistics/toplists/index.html> (Last consulted on December 10. 2007)• Kenyon D.A. and Kincaid J. (eds.), 1991, Competition among States and Local

Governments. Efficiency and Equity in American Federalism. Washington, The Urban Institute Press.


References

• Levine N., 1973, Why do countries win Olympic medals? Some structural correlates of Olympic Games success:1972. Sociology and social Research, vol. 29-3, p. 353-360.

• Lui H.K. and Suen W, 2007, Men, money and Olympic medals. Working paper. • Moosa I.A. and Smith L., 2004, Economic development indicators as determinants of medal

winning at the Sydney Olympics: an extreme bounds analysis. Australian Economic Papers, vol. 43-3, p.288-301.

• Pershin V. and Tcha M., 2003, Reconsidering performance at the Summer Olympics and revealed comparative advantage. Journal of Sports Economics, vol. 4, p. 216-239.

• Poupaux S., Soviet and post-soviet sport, in Andreff W.and Szymanski, S. (eds.), 2006. • Riordan Ji., Elite sport policy in East and West, in Allison L. (ed.), 1986. • Riordan Ja., Sport in capitalist and socialist countries: a western perspective, in Dunning E.,

Maguire J. and Pearton R. (eds.), 1993. • Scherer F.M., 2004, Quarter notes and banknotes. The Economics of music composition in

the eighteenth and nineteenth centuries. New Jersey, Princeton University Press. • Shneidman N., 1979, The Soviet Road to Olympus. London, Routledge & Kegan Paul. • Shughart W. and Tollison R., 1993, Going for the Gold: Property Rights and Athletic Effort in

Transitional Economies. Kyklos, vol. 46 (2), p. 263-272. • Tcha M., 2004, The color of medals. An economic analysis of the Eastern and Western

Blocs’ performance in the Olympics. Journal of sports economics, vol. 5, p.311-328. • Wilson J.D., 1986, A theory of interregional tax competition, Journal of Urban Economics

19, 296-315.

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