How to explain the diverging Olympic harvests of Emerging Markets?
If one set of statistics were to remind us of the heterogeneity of the Brics grouping, it could be this year’s medal table. China, with 38 trophies, continued to impress (albeit falling second to the US). Russia was next, with a decent 24 golds. But their other teammates proved paltry performers. Brazil ranked 21st with 3 gold medals; South Africa was right behind, with the same numbers of trophees; and India, with four bronzes and two silvers, ranked 55th.
The broader Team EM displayed equally variable performances. While its best members enjoyed a bumper medal harvest (South Korea: 13 golds, Hungary: 8, Ukraine: 5) others failed to make it to the first step even once (Thailand, Indonesia, Malaysia). Some markedly improved on their Beijing performance (Kazakhstan: from 29thto 12th), while others significantly slipped down the table (Belarus: from 16th to 26th).
This may not come as a surprise to many sport enthusiasts, who take the variable performance of athletes – and countries – as part of the fun. But it will undoubtedly continue to puzzle economists. Sport performance, they say, is very much like economic achievement: the result of hard work and investment. So why is it that some Emerging Markets are running far ahead of the pack, while others remain stuck behind the starting line?
In fact analysts have long tried to answer similar questions. For the London Olympics, Econometricians have been crafting ever-sophisticated models to predict the medal tally of each participating nations. Now that the Games are over, it is interesting to see how well they fared: the FT tells us about it here. As you’ll notice it doesn’t look as if there is a clear winner.
It does look as if some factors have more explanatory power than others, however. Start with population. Of course you’d expect this to be a major determinant of Olympic performance, since the wider the pool of talents the more chances you have of raising a world-beating one. But it fails to account for most of the story, really. Yes, the US, China and Russia are all big countries, and they’re all top-ranking sporting nations. But then, where have Brazil 190m, or worse, India’s 1.2bn, been hiding over the last two weeks? And why have Kazakhstan’s 16m, or Jamaica’s 2.9m, been on to do so well?
GDP per capita seems to fare better. It’s intuitively obvious why it would: the richer a country, the more it can invest in sporting infrastructure and training; and the richer its people, the more they can afford to try out a sport and get good at it. As far as the emerging world is concerned, the theory works with China, Russia, India, and a few well-performing Eastern European nations (look at the World Bank GDP per capita table here). But we’re still stuck with our Brazilian, Kazakh or Jamaican puzzles, who don’t perform according to their GDP ranking. And that’s without looking at Israel, Chile or Qatar, who by our current criterion should be aiming for a top spot, got 2 bronzes between them 3.
So analysts have come up with other, more discriminating factors. One is a so-called ‘Soviet effect’, whereby planned economies of the communist world tend to outperform – mainly by coercing their younger talents into specialising in winning disciplines and enforcing a degree of discipline hardly imaginable in the West. True, it probably is one of the less-discussed factors behind China’s Olympic rise. Maybe it also has a role to play in other authoritarian regimes, like Russia, Belarus or North Korea. But since the fall of the Berlin wall, such strategies – which were often complemented by regular injections of steroids – have lost a bit of their worldwide appeal. And it remains hard to measure whether they would really make a difference outside a very small sample.
A more relevant factor seems to be the ‘host effect’. Looking at the London, Beijing or Sydney Games it seems obvious that the host nation wins more medals than it would otherwise. China, for instance, did not do as well as last time, when its stellar performance illuminated the Beijing Games. Team GB massively outperformed in 2012. But why host countries do so well remains unclear, and the effect is also hard to quantify (not many people got it right this time). And of course, it only applies to one nation at a time.
In fact, Olympic success seems to come from a combination of more idiosyncratic, qualitative factors. One is an enduring heritage in a medal-rich discipline: Jamaica’s pre-eminence in sprint events, for example, is a product of a strong track-and-field tradition, dating back to the days of British rule – as brilliantly explained in an FT article here. This applies to other sports and countries as well: see a table from the Economist here.
It also helps to have a public strongly interested in the Games (something Brazil doesn’t have, apart from its well-known passion for football), and a culture that heralds successful athletes as national heroes (something India doesn’t have, as an athlete’s bigger reward from winning a medal seems to be a governmental job rather than domestic glory). Crucial too is to make the right choices in preparing one’s athletes: focus on fewer sports where you have a competitive advantage, rather than trying to do well at everything (see Jamaica vs. Norway). Finally, and most importantly, putting up a good performance at the next Olympics needs to be an explicit policy goal. Brazil, for example, has just announced that it would devote more money, and design new schemes, to nurture its budding talents. Its aim is to double its medal tally in four years' time.
All this may be hard to put in a quantitative model. But it still tells us something. There might be a few necessary conditions to being a successful Olympic nation: reasonably rich, focused and patriotic. But none of them seems to guarantee one’s place in pole position. So it is probably fair play for economists to give it a shot - but a good bit of what ultimately happens on the field will probably forever remain up for grabs.