Who are the champions? Inequality, economic freedom and the Olympics

Abstract

Does inequality affect outcomes? To answer, we use the microcosm of Olympic competitions by asking whether a country's level of inequality diminishes its performance. If it does, is it conditional on institutional factors? We argue that the ability of economically free societies to win medals will not be affected by inequality. In these societies, institutions generate incentives to invest in the talents of individuals at the bottom of the income distribution (potential athletes otherwise constrained in the ability to expend resources on training). These effects mitigate those of inequality. The incentives that promote investments in skills across the income distribution are weaker in unfree societies and they cannot mitigate the effects of inequality. Using the Olympics of 2016 in combination with the Economic Freedom data, we find that inequality only matters in determining medal numbers for unfree countries. We link these results to inequality and its effects on economic outcomes.

Property Rights Freedom and Innovation: Eponymous Skills in Women's Gymnastics

“…It also finds that lagged values of medals awarded are significant, suggesting that prior performance success captures unobservable country-specific attributes that contribute to a country's medal count. More recently, Kufenko and Geloso (2021) examine the effect of economic inequality on Olympic performance. They assert that the ability of economically free societies to win Olympic medals is unaffected by inequality, given that economic and other institutions present in these societies promote investments in the talents of individuals at the bottom of the income distribution (i.e., potential athletes otherwise constrained in the ability to expend resources on training).…”

“…They assert that the ability of economically free societies to win Olympic medals is unaffected by inequality, given that economic and other institutions present in these societies promote investments in the talents of individuals at the bottom of the income distribution (i.e., potential athletes otherwise constrained in the ability to expend resources on training). In other words, economic freedom mitigates any adverse effects of economic inequality (Kufenko & Geloso, 2021). On the other hand, the incentives that promote investments in skills across the income distribution spectrum are weaker in less free countries.…”

“…On the other hand, the incentives that promote investments in skills across the income distribution spectrum are weaker in less free countries. Based on data on economic freedom and the 2016 Olympic Games, Kufenko and Geloso (2021) report support for their assertion that economic inequality matters only in the determinant of Olympic success in less free countries. Lastly, the results in Kufenko and Geloso (2021) also suggest that effort is very elastic if economic freedom is viewed as increasing effort supply.…”

“…Based on data on economic freedom and the 2016 Olympic Games, Kufenko and Geloso (2021) report support for their assertion that economic inequality matters only in the determinant of Olympic success in less free countries. Lastly, the results in Kufenko and Geloso (2021) also suggest that effort is very elastic if economic freedom is viewed as increasing effort supply. The seminal study by Shughart and Tollison (1993), which is discussed in greater detail below, makes a robust case for the elasticity of effort in Olympic contests.…”

Understanding COVID-19: A Hybrid Threat and Its Impact on Sport Mega-Events. A Focus on Japan and the Tokyo 2020 Olympic Games

“…COVID-19 was only going to be solved by all nations working together against this hybrid threat to create a vaccine to survive and thrive. These values constitute the foundation on which the Olympic Movement builds its activities to promote sport, culture, and education to build a better world and reduce inequality (Kufenko and Geloso, 2021 ). Thus, COVID-19 as a hybrid threat to the world needed a coordinated approach to promote peace and harmony ensuring those nations that could not afford the vaccine were helped and not seen as a bidding war only for the developed nations who could afford it.…”