Explaining globalization through soccer!

Dani Rodrik is a professor of International Political Economy at Harvard University, where he teaches in the prestigious MPA/ID program. As a regular visitor of Rodrik’s blog, and following up on a recent talk Rodrik gave at the LSE, I came across a wonderfully light yet ingenious short piece written about a year ago, in which he describes the current globalization dilemma in terms of football (soccer).

An overview of the key points:

1. European clubs have loosened restrictions, and players from all over the globe are indeed being traded and sold as if they were mere commodities.
2. This increase in mobility has undoubtedly increased the earnings gap between African stars plying their trade on the European fields, and their fellow citizens back home; this type of inequality, however, is not necessarily a bad thing, as it can be a Pareto-optimal outcome (some are better off, nobody is worse off).
3. New regulations are being proposed to limit the number of foreign players in any team, and imposing minimum quota on how many home-grown players should be in the first 11.
4. Domestic leagues, both in Africa as well as in poorer areas in Europe, are suffering and seeing a mass exodus of talent. Ergo, the domestic league does not benefit from its own talents, and has no tools for keeping the talent within national borders.

Rodrik then comes to a highly interesting conclusion, arguing that the most successful clubs and national teams will be those who can combine the opportunities presented by globalization with strong domestic foundations. He gives the example of Egypt, the most successful nation in the history of the African Cup of Nations, winning the latest edition with only 4 of the 23 players playing in Europe (arguably their star players), and a backbone of home-grown players more familiar with Egypt’s style of play. Compare this to Cameroon, who only had 1 domestic player on the teamsheet… but still made it to the final).

Rodrik concludes: “What sets apart the Chinas and Indias of this world is not that they have laid themselves bare to the forces of globalization, but that they have used those forces to enhance their domestic industrial and productive capacities.  The benefits of globalization come to those that do their homework.”