Economic Development

Sport can contribute to economic development by creating additional sources of income such as the manufacture of sporting goods

OVERVIEW

Sport can contribute to economic development by creating additional sources of income such as the manufacture of sporting goods, the development of sport-related services, infrastructures or sports events. In addition, sport can also produce indirect economic effects by improving the overall health of a community that is physically active thus contributing to a reduction in spending on health and increasing labour productivity.

Sport has grown to constitute a considerable sector of the economies of most industrialised countries. The challenge today is to determine how such economic potential can be harnessed so that the benefits may be felt by both developed and developing countries.

MAJOR EVENTS

15.12.1995: The European Court of Justice gives Belgian football player Jean-Marc Bosman (and by implication, all other EU football players) the right to transfer freely within Europe at the end of his contract which marks the end of foreign player quotas in European clubs.

1997: The World Federation of the Sporting Goods Industry (WFSGI) Committee on Ethics and Fair Trade develops a Model Code of Conduct in order to promote fair trade in sporting goods internationally.

2000: Revision of the WFSGI Code of Conduct which clearly refers to International Labor Organisation norms such as bargaining conditions and wages.

09.2001: FIFA revises its international transfer regulations.

07.2005: FIFA revises its international transfer regulations.

CURRENT CONCERNS

In developing countries, athletes and talented sportsmen and women tend to leave their home country once their sporting abilities are of a standard at which they could consider competing internationally. The migration of athletes (which is particularly common in football) is often referred to as muscle drain. The notion of compensating home countries often in the developing world has recently gained further ground. Different options are currently under highly publicised consideration. For example: (a) the option of taxing international transfers (the Coubertobin tax); (b) the new FIFA international transfer regulation.

International trade in sporting goods has been a concern in the past decade such as the relocation of the production branch in developing countries, their specialisation in the production of lower value sporting products or the working conditions in the sports goods industry – particularly the issue of child labour. These questions remain contentious and currently the lack of data in the field of international trade in the sporting goods industry, mainly in developing countries continues to plague the debate.

“International trade in sporting goods and the role of transnational corporations in their production remain among the most unheeded areas of research in the economics of sports. These topics deserve and require more empirical investigation that could be used as a rocket pad for more elaborated economic analysis” (Andreff, 2004: 10).

Is it possible to minimise the north-south gap in sporting performances? Strong national or individual performances are likely to encourage the development of sports infrastructures, programmes and coaches in developing countries.