November 24, 2023 - 2 min

The gold rush (part 2)

The institutionalization of sports makes it possible to be more efficient in identifying talent, maintaining facilities and taking advantage of synergies that atomized organizations would not be able to use.

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Last week, we reviewed the cost of obtaining an Olympic medal the cost of winning an Olympic medal, in the context of the discussion on state funding for athletes in Chile, after a successful Pan American Games. Considering all the variables involved, we concluded that an average of approximately US$40 million on average, in each Olympic cycle, to obtain a medal. However, this did not take into account all the costs involved, this did not take into account all the costs involved, especially those related to infrastructure and others of a public nature that by definition are complex to apportion.

However, we are only considering part of the story. It may seem tremendously challenging to obtain those resources, especially knowing that they were not spent on other things, but that is only a necessary condition. Although it is often looked down upon, the management of those resources is tremendously important, perhaps even more so than having the amounts in the first place. I mention this because there are countries that have those resources, and have even spent them and have not had the Olympic results that would be sought, as well as there are countries that do not have them and obtain many more medals than others with more resources and population.

In a study by Danyel Reiche, author of "Success and Failure of Countries in the Olympic Games" (the translation of the title is mine), in addition to resources, the key lies in public policies. He summarizes them in the acronym WISE: promote women's sport (Women), institutionalize (Institutionalizing) national sports policy, specialize (Specializing) in promising disciplines and early adopt (Early adoption) the trends of potential new sports.

Why would women's sports help? There is nothing very intricate here, it is a matter of probabilities. Without a women's delegation, medals cannot be won in women's disciplines. The Chinese, who have the highest female participation in their delegations, know this very well, which allows them to have more medals than any other country in the world, with the exception of the United States. Countries without this participation, essentially Muslim, lose this possibility. Some studies even suggest that countries with better gender equality obtain better sports results.

The institutionalization of sport makes it possible to be more efficient in identifying talent, maintaining facilities and taking advantage of synergies that atomized organizations would not be able to use. Contemporary examples of this are the Australian Institute of Sport (AIS) and the Norwegian Olympiatoppen. Norwegian Olympiatoppen. Despite what one might think, these institutions do not necessarily have to be state-run: the U.S. Olympic Committee is a non-profit organization that does not receive federal funding.

Specializing in disciplines that make medaling more likely, depending on each country's comparative or historical advantages, is also an important factor. Australia specializes in swimming, China in weightlifting. Ethiopia, a relatively poor country, focuses on long-distance runners (similar to Kenya), similar to what Jamaica does in sprint disciplines. Some countries choose not to specialize, under the ideal of being equitable, which has resulted in fewer medals, such as Sweden and Finland.

Finally, incorporating trends ahead of the rest allows us to generate the comparative advantages that others do not yet have. Fewer countries competing increases the likelihood of medals. Consider that break dancing, rock climbing, surfing and skateboarding will debut in Paris 2024, while five are being proposed for Los Angeles 2028: baseball, cricket, lacrosse, squash and flag football (American soccer without tackles). It doesn't sound so crazy, then, that we as a country should promote women's surfing, does it?

Nathan Pincheira

Chief Economist at Fynsa