This time from Africa? Economic lessons from the beautiful game, especially the African model

Around 2/3rd of the 48 teams that qualified for the ongoing World Cup final rounds are high-income or upper-middle-income economies. Roughly 1/3rd are lower-middle-income or low-income economies.

Economists who tend to poke their noses into the Beautiful Game have long sought to find a relationship between income - both aggregate or GDP, or average per capita - of economies and their performance in the highest level of international competitive football.

Instead of a neat upward curve that relates football glory with per-capita income, they find a curve that rises with per-capita GDP, and then slowly flatlines. This roughly occurs at the middle-income or upper-middle-income levels, associated with countries like Argentina, Brazil and Croatia.


Success stories of 'late starters', who, unlike Latin America, did not have the 'religious' passion for football, validate the GDP link. Take the rise of rich oil-producing West Asian nations like Saudi Arabia and Qatar. These started doing well at the Asian level and in youth competitions in the 1980s. But their subsequent rise on the international stage has been spectacular.

Their recipe of success is well known: invest heavily in infrastructure including training academies, elevate the status of national leagues, in Saudi's case by bringing in international stars.

The US is another example of a nation late to the party, but whose income levels helped raise its footballing status. North American Soccer League collapsed in the 1980s due to lack of visibility. Since then, the US' steady climb, despite dominance of legacy sports like American football, baseball and basketball, may well support the argument that money works in promoting late entrants.

The curious case - and one that could be of enormous importance to development economists and policymakers - relates to the 1/3rd of the 48, particularly the low- and low-middle-income African countries like the Democratic Republic of Congo (DRC), Ivory Coast, Senegal and Cape Verde. DRC has a per-capita income of about $900, and Senegal $2,000.

Does the African model have lessons for the way we view development strategies? Let's set aside diasporic players who grow up in the European football system, and focus on the 'pure African' way.

Private football academies: Diambars football academy in Senegal, Ghana's Right to Dream (RtD) youth development programme, and Ivory Coast's MimoSifcom academy are examples. These are enclaves insulated from political interference. Revenues come from private investors and transfer fees from European clubs that players represent. These also provide safe haven during civil unrest.

One could argue that these enclaves are a pat on the back for the bottom-approach, or 'doable' development loosely associated with Randomista, or randomised control experiment approach. The right structure - let's call them sub-institutions (SIs) - when designed to specific outcomes can deliver. More importantly, SIs can work well within poor economic and political institutions.

Sceptics would argue that this is simply a case of demand creating its own supply. Demand for talent from richer countries has built a supply pipeline from Africa. But talent is not a homogeneous low-end product like potatoes. The curious thing is the SI response to supply opportunities where academies have been allowed to function freely and be capable of supplying quality talent.

Left economists may see this as 'colonisation redux', a case of pure extraction with terms of trade heavily tilted against the 'colonised'. Instead of rare earths, richer countries are mining another scarce resource - skilled footballers. This is, at best, an incomplete characterisation. Search for talent is actually buffering the supply base of talent, akin to mining activities actually boosting reserves of, say, coltan or gold.

Model Africa is creating things that economists would love to see. First, there are spillovers, or externalities, helping local football flourish. True, there are more problems at the local level than at the international level. But things are changing.

The multinational Africa Cup of Nations (Afcon) is a major event on the global football calendar. The fact that club leagues within countries, despite stadium and other infrastructure shortages, are gaining traction is particularly encouraging.

This is not confined to elite tournaments. Tanzania's Premier League and Angola's Girabola, for instance, have become immensely popular. Local investments are coming through for support - billionaire backing and TV right sales in Tanzania, and diamantaire money in Angola.

What has followed is a virtuous circle of intra-continental trade in football skills. Player fees in other countries are lower than in the elite regions. Consequently, there's considerable migration of talent. As a result, fees in exporting economies should see an increase. Economists would predict that this could be the path to the holy grail of 'convergence' in player incomes and talent across the region, bootstrapping the entire continent in the process.

Success breeds success. Glory of African teams in international tournaments has also driven across countries to step up domestic football institutions. For them, the gold standard is Morocco's Mohammed VI football academy.

Economists should take away a couple of things from the African football model:

• Hyper-focused 'institutions' of the right sort are important, and their independence is key to their delivering right outcomes. The SI success proves that isolated delivery systems can work well in environments typically associated with weak governance and economic instability.
• Trade, both at global and intra-regional level, is a benign force.

It may be worthwhile for development experts to think of whether the African model can be replicated elsewhere. Reworking models of foreign aid and philanthropy to work better, for instance?