Convergence versus the middle-income trap: the case of global soccer

Abstract

ABSTRACTUnconditional convergence across countries worldwide is typically rejected in terms of GDP per capita. But when focusing on a specific internationally competitive industry, such as manufacturing, rather than the overall economy, unconditional convergence has been found to hold. As the epitome of competition and globalization, this paper uses the performance of national soccer teams as a further test case. We rely on data of more than 25,000 games between 1950 and 2014 and find clear evidence of unconditional - and -convergence in national team performance, as measured either by win percentages or goal difference. We argue that transfer of technologies, skills and best practices fosters this catch-up process. But there are limits: we show that good teams from Africa and Asia are failing to close the gap with top European or South American teams for reasons that are analogous to the 'middle income trap'. Lessons for other sectors include the virtues of internationally transferable human capital as well as the mixed blessings of regional integration for worldwide convergence.