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1. Governance and the Challenge of Development Through Sports: A Framework for Action

Author:
Matt Andrews, Stuart Russell, and Cristina Barrios
Publication Date:
07-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Previous papers such as Russell, Barrios & Andrews (2016), Guerra (2016), and Russell, Tokman, Barrios & Andrews (2016) have aimed to provide an empirical view into the sports economy. This proves to be a difficult task, given the many definitions of ‘sports’ and data deficiencies and differences in the sports domain (between contexts and over time). The emerging view in these previous papers provides interesting information about the sports sector, however: it shows, for instance, that different contexts have differently intensive sports sectors, and that sports activities overlap with other parts of the economy. This kind of information is useful for policymakers in governments trying to promote sports activities and use sports to advance the cause of broad-based social and economic development. This paper is written with these policymakers in mind. It intends to offer a guide such agents can use in constructing sports policies focused on achieving development goals (what we call development through sports[1]), and discusses ways in which these policymakers can employ empirical evidence to inform such policies. The paper draws on the concept of ‘governance’ to structure its discussion. Taking a principal-agent approach to the topic, governance is used here to refer to the exercise of authority, by one set of agents, on behalf of another set of agents, to achieve specific objectives. Building on such a definition, the paper looks at the way governmental bodies engage in sports when acting to further the interests of citizens, most notably using political and executive authority to promote social and economic development. This focus on governance for development through sports (asking why and how governments use authority to promote sports for broader social and economic development objectives[2]) is different from governance of sports (which focuses on how governments and other bodies exercise authority to control and manage sports activities themselves), which others explore in detail but we will not discuss.[3] The paper has five main sections. A first section defines what we mean by ‘governance’ in the context of this study. It describes an ends-means approach to the topic—where we emphasize understanding the goals of governance policy (or governance ends) and then thinking about the ways governments try to achieve such goals (the governance means). The discussion concludes by asking what the governance ends and means are in a development through sports agenda. The question is expanded to ask whether one can use empirical evidence to reflect on such ends and means. One sees this, for instance, in the use of 'governance indicators' and 'governance dashboards' in the international development domain. A second section details the research method we used to address these questions. This mixed method approach started by building case studies of sports policy interventions in various national and sub-national governments to obtain a perspective on what these policies tend to involve (across space and time). It then expanded into an analysis of sports policies in a broad set of national and sub-national governments to identify common development through sport ends and means. Finally, it involved experimentation with selected data sources to show how the ends and means might be presented in indicators and dashboards—to offer evidence-based windows into development through sports policy regimes. Based on this research, sections three and four discuss the governance ends and means commonly pursued and employed by governments in this kind of policy process. The sections identify three common ends (or goals)—inclusion, economic growth, and health—and a host of common means—like the provision of sports facilities, organized activities, training support, financial incentives, and more—used in fostering a development through sports agenda. Data are used from local authorities in England to show the difficulties of building indicators reflecting such policy agendas, but also to illustrate the potential value of evidence-based dashboards of these policy regimes. It needs to be stated that this work is more descriptive than analytical, showing how data can be used to provide an evidence-based perspective on this domain rather than formally testing hypotheses about the relationship between specific policy means and ends. In this regard, the work is more indicative of potential applications rather than prescriptive. A conclusion summarizes the discussion and presents a model for a potential dashboard of governance in a development through sports policy agenda.
Topic:
Development, Governance, Sports, and Economic Policy
Political Geography:
Europe and England

2. Keeping One's Eye on the Ball: Exploring the Intensity of Sports Activities across Europe

Author:
Stuart Russell, Carla Tokman, Douglas Barrios, and Matt Andrews
Publication Date:
07-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
As described in Russell, Barrios & Andrews (2016), past attempts to understand the sports economy have been constrained by a number of data limitations. For instance, many of these accounts use revenues when value added measures would be more appropriate. Similarly, many accounts use top-down definitions that result in double counting and an inflated estimate of the size of the sports economy. More importantly, past accounts have focused most of their efforts estimating the overarching size of the sports economy. Constrained by aggregated data that groups a wide range of sports-related economic activities together, they primarily discuss the size of the sports-related economic activity. Their focus on answering the question of "How big?" conceals substantial differences between activities. Core sports activities, such as professional sports teams, behave very differently than activities, like sporting goods manufacturing that are closer to the periphery of the sports economy. Likewise, there are even important differences amongst core sports activities. Professional sports teams are very different than fitness facilities, and they might differ in different respects. Guerra (2016) demonstrates that, when detailed, disaggregated data are available, the possibilities to analyze and understand the sports are greatly increased. For instance, Guerra (2016) were able to conduct skills-based analyses, magnitude analyses, employment characterizations, geographic distribution analyses, and calculations of the intensity of sports activities. The sector disaggregation, spatial disaggregation, and database complementarity present in the Mexico data used in that paper therefore enables a more detailed and nuanced understanding of sports and sports-related economic activity. Data with characteristics similar to those found in Mexico are few and far between. We have, unfortunately, been unable to completely escape such data limitations. However, we have compiled and analyzed a large array of employment data on sports-related economic activities in Europe. In the paper that follows, we describe our analyses of these data and the findings produced. Section 1 begins with a discussion of employment in sports and an explanation of why we chose this variable for our analyses. Section 2 provides an overview of the data used in this paper particularly focusing on the differences between it and the Mexico data discussed in Guerra (2016). It also describes the methodology we use. We analyze these data using one of two related measures to understand the intensity of sports-related activities across different geographic areas in countries. We also construct measures at the level of a single country in order to compare across entire economies. At the international level, we adopt the revealed comparative advantage (RCA) measure that Balassa (1965) first developed to analyze international trade. Within specific countries, however, we use a population-adjusted version of the RCA measure known as RPOP. Section 3 presents the most relevant findings and Section 4 discusses their limitations. Section 5 concludes with the lessons learned and avenues for future research. While there are limitations on these analyses, they can give policymakers a better understanding of the distribution and concentration of sports across space. Such information can serve as an important input for sports-related investment decisions and other sports-related policies.
Topic:
Employment, Sports, Economy, and International Development
Political Geography:
Europe, Central America, and European Union

3. Getting the Ball Rolling: Basis for Assessing the Sports Economy

Author:
Stuart Russell, Douglas Barrios, and Matt Andrews
Publication Date:
07-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Data on the sports economy is often difficult to interpret, far from transparent, or simply unavailable. Data fraught with weaknesses causes observers of the sports economy to account for the sector differently, rendering their analyses difficult to compare or causing them to simply disagree. Such disagreement means that claims regarding the economic spillovers of the industry can be easily manipulated or exaggerated. Thoroughly accounting for the industry is therefore an important initial step in assessing the economic importance of sports-related activities. For instance, what do policymakers mean when they discuss sports-related economic activities? What activities are considered part of the "sports economy?" What are the difficulties associated with accounting for these activities? Answering these basic questions allows governments to improve their policies. The paper below assesses existing attempts to understand the sports economy and proposes a more nuanced way to consider the industry. Section 1 provides a brief overview of existing accounts of the sports economy. We first differentiate between three types of assessments: market research accounts conducted by consulting groups, academic accounts written by scholars, and structural accounts initiated primarily by national statistical agencies. We then discuss the European Union’s (EU) recent work to better account for and understand the sports economy. Section 2 describes the challenges constraining existing accounts of the sports economy. We describe two major constraints - measurement challenges and definition challenges - and highlight how the EU's work has attempted to address them. We conclude that, although the Vilnius Definition improves upon previous accounts, it still features areas for improvement. Section 3 therefore proposes a paradigm shift with respect to how we understand the sports economy. Instead of primarily inquiring about the size of the sports economy, the approach recognizes the diversity of sports-related economic activities and of relevant dimensions of analysis. It therefore warns against attempts at aggregation before there are better data and more widely agreed upon definitions of the sports economy. It asks the following questions: How different are sports-related sectors? Are fitness facilities, for instance, comparable to professional sports clubs in terms of their production scheme and type of employment? Should they be understood together or treated separately? We briefly explore difference in sports-related industry classifications using data from the Netherlands, Mexico, and the United States. Finally, in a short conclusion, we discuss how these differences could be more fully explored in the future, especially if improvements are made with respect to data disaggregation and standardization.
Topic:
Development, Sports, Economy, and Economic Policy
Political Geography:
Europe and European Union

4. Off Pitch: Football’s financial integrity weaknesses, and how to strengthen them

Author:
Matt Andrews and Peter Harrington
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Men’s professional football is the biggest sport in the world, producing (by our estimate) US $33 billion a year. All is not well in the sector, however, with regular scandals raising questions about the role of money in the sport. The 2015 turmoil around FIFA is obviously the most well known example, creating a crisis in confidence in the sector. This study examines these questions, and the financial integrity weaknesses they reveal; it also offers ideas to strengthen the weaknesses. The study argues that football’s financial integrity weaknesses extend far beyond FIFA. These weaknesses have emerged largely because the sector is dominated by a small elite of clubs, players and owners centered in Europe’s top leagues. The thousands of clubs beyond this elite have very little resources, constituting a vast base of ‘have-nots’ in football’s financial pyramid. This pyramid developed in recent decades, fuelled by concentrated growth in new revenue sources (like sponsorships, and broadcasting). The growth has also led to increasingly complex transactions—in player transfers, club ownership and financing (and more)—and an expansion in opportunities for illicit practices like match-fixing, money laundering and human trafficking. We argue that football’s governing bodies – including FIFA – helped establish this pyramid. We explore the structural weaknesses of this pyramid by looking at five pillars of financial integrity (using data drawn from UEFA, FIFA, clubs, primary research, and interviews). In the first pillar of Financial Transparency and Literacy we find that a vast majority of the world’s clubs and governing bodies publish no financial data, leaving a vast dark space with no transparency. In the second pillar of Financial Sustainability we estimate that a majority of global clubs and governing bodies are at ‘medium to high risk’ of financial failure. We find, additionally, that European tax debts have grown despite Financial Fair Play, and confederations and FIFA contribute to a pattern of weak Fiscal Responsibility. We then create a new metric of Financial Concentration and find that the football sector is at ‘high risk’ of over-concentration, which poses existential questions for many clubs and even leagues. In the final pillar of Social Responsibility and Moral Reputation, we find that football’s governing bodies face a crisis of legitimacy stemming from a failure to tackle moral turpitude, set standards and regulate effectively. We suggest a set of reforms to re-structure FIFA in particular, separating its functions and stressing its regulatory role.
Topic:
Crime, Sports, Economy, and World Cup
Political Geography:
Europe, Global Focus, and European Union

5. Has Sweden injected realism into public financial management reforms in partner countries?

Author:
Matt Andrews
Publication Date:
09-2015
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Public financial management (PFM) reform is a common part of many development initiatives. It generally involves promoting "good practices" in developing countries, embedded in frameworks like the Public Expenditure and Financial Accountability (PEFA) assessment (PEFA 2006). These include multi-year budgeting, competitive procurement, modern internal audit, and more. Such practices have proved effective in selected contexts and promise solutions to common problems in governments. Unfortunately, a growing literature shows that many governments do not solve their problems after years of adopting such solutions. Data reveal that governments commonly produce new laws that are not enforced and budgets that are not effectively executed, and suffer from weak capacities in distributed units (like line ministries and local governments) after many finished projects (Andrews 2006, 2011, 2013; Porter et al. 2011; Wescott 2009). Studies tie these limits to a lack of realism in reform design and implementation (Andrews 2013; Andrews, Pritchett and Woolcock 2012; Booth 2011; Levy 2013; World Bank 2012). They argue, essentially, that reforms commonly fail to allow for necessary adaptation of external ideas to the realities in targeted contexts, often because the reform processes focus too narrowly on introducing the external good practice in principle and pay little attention to the practical difficulties of doing so in practice. Studies suggest, for instance, that such reforms pay insufficient attention to the political and administrative difficulties of effecting change, and that these difficulties commonly undermine reform results. Where studies see more effective and far reaching reform they often find that the externally nominated "good practices" are fitted to the targeted context through more adaptive processes that emphasize the real and practical issues of doing reform (like building reform support, testing and adjusting reform designs, and continually matching solutions and capacity realities and needs) (Andrews 2015; Andrews et al. 2014; Cabri 2014; Levy 2013). These studies call for approaches that allow more realism in reform processes in developing countries, especially those supported by multilateral and bilateral donors. They do so knowing that similar calls have been made before; and that there are already many examples of such realism in the development community. There is, however, a challenge to identify these examples and describe what such processes look like in practice. This search leads quickly to a focus on bilateral donors. A small and interesting set of work suggests that such donors might have a comparative advantage in introducing more realism to PFM-type reforms in developing countries, given their own country’s recent experiences with doing such reforms. The argument is simply that development agencies from these countries can leverage the real experiences with doing reform in their own contexts when engaging with reformers in developing countries. They can, for instance, access experienced reformers to share lessons on issues like building demand for change, establishing political support for reform, and adapting reform ideas to context. Such lessons are often learned best through experience and remain tacit in those who have been through the experience. Bilateral agencies arguably have an advantage in accessing such people and their lessons, and can more effectively incorporate this valuable knowledge into their reform support than multilateral agencies. This paper offers a novel analysis of this theory, asking whether Swedish development agencies working in the PFM field have leveraged the potential comparative advantage of the country’s own experience in supporting reform. The country’s own reforms have resulted in effective Sweden-specific adaptations of many of the good practices being promoted in developing countries today (including multi-year budgeting and modern accounting and audit). Academic descriptions of these reforms emphasize the processes by which they were adopted and the realism involved in such, and suggest the presence of many applied and tacit lessons one could see as valuable in developing countries (about testing reform ideas, for example, progressing gradually in reform processes, creating an urgent pressure for change, and building support for reform). The question asked here is whether Swedish development agencies bring these lessons into their support for PFM work, building on a potential advantage to promote realism in reform.
Topic:
Reform, Finance, Economy, International Development, and Institutions
Political Geography:
Europe, Sweden, and European Union

6. Being Special: The Rise of Super Clubs in European Football

Author:
Matt Andrews
Publication Date:
01-2015
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Professional football clubs are ubiquitous in Europe. Every small to medium sized city has one. But most cities do not have an F.C. Barcelona or Bayern Munich or Manchester United. These are among the ‘super clubs’ of Europe: they win more games, attract more supporters, and make more money than other clubs. These clubs were not always the juggernauts one sees today, however. This paper looks at how they emerged. It tells more of an economic story than a sporting one, recounting a narrative similar to that one might tell about the emergence of successful multinational companies. According to this narrative, super clubs rise by producing increasingly more complex products because of expanding productive capabilities, providing growing opportunities for economic spillovers in the process. As indicated, this narrative focuses particularly on the ‘capabilities’ that have helped super clubs emerge. This focus draws on an emerging theory about economic complexity, which is used to frame the paper and is briefly introduced in section two (following an introduction to super clubs). The theory posits that production results from the creative combination of economic capabilities—or know-how. Some products require few common capabilities, are produced by everyone, and have relatively low value: like the average football club. Other products require many capabilities (including some that are rare), have high value, and are produced by a select group: like the super club. This theory is used to suggest two hypotheses about how football clubs become super: First, clubs do not become super by just producing better versions of the same products (a successful football team). Instead, over time, these clubs produce more complex, higher-value, globally consumed products. Second, clubs become super by accumulating new capabilities (or know-how) over time, manifest in new skills and people accessed through a range of ‘catalyst capabilities’ that source the skills. The catalyst capabilities include engagement mechanisms (through which skills are located and contracted), capital, infrastructure, and adaptive leadership. These hypotheses are put to the test in this study.
Topic:
Economics, Sports, and Economic Complexity
Political Geography:
Europe and European Union