Olympic Games

Author: Irakli Barbakadze

Economists see economics everywhere. If we take Olympic Games, it is a huge sport event with lots of emotions, anthems, tears and everything related to patriotic spirit but on the other hand it is a good research topic for economists to explore some interesting behind the "Medals". 

So, every 4 years the topic of Olympics is always actual but not only for sportsmen. Scientists try to predict countries performance. The most common method is to predict number of medals if we control country’s GDP per capita and the number of population. Larger and wealthier countries have more chance to be in top of ranking, such as: US, China, Russia, UK and others. This topic does not need more investigation but to find other sources of success is still interesting. Pwc reports economic briefing paper about modelling Olympic performance before starting  every Olympic Games. They found that together with GDP per capita and population, countries from the former Soviet Union have significant advantage factor to get medals. This shows that sport is one area where state planning and intervention can produce results.

The graph below also supports our notion. If we take, for example Ukraine we can see that with its 20 medals in 2012 it is in top 11 countries in the world. Their performance is better than the following developed countries, such as: Sweden, Denmark, Canada, Finland and many others. In case of Russia, the situation is much more better, they are the third top medalist countries, together with china and unites states.

Chart 1. Relationship between number of medals and GDP per capita (log)

Source: http://www.sports-reference.com

So, we know that post societ countries perform well in sport other than more developed countries but let’s check the dynamics of the performance. We start from 1988 because previous two Olympic Games were kind of different because in 1984 Soviet Union boycott this games which was the response to United States decision which boycott in 1980, Moscow Games. In 1988 was the last Olympics for the Soviet Union and they gathered 132 medals. In 1992 after ruined Soviet Union 12 countries out of 15 (Latvia, Lithuania and Estonia participated separately) created Unified team. It is obvious that for all the countries these period was so dramatic after independent and in overall the total performance was not as good as in 1988 but they collected 119 medals.



Chart 2. Total number of medals in Post Soviet countries

Source: http://www.sports-reference.com

 

As we mentioned above Olympic Games is kind of patriotic spirit. So countries after Soviet Union had more such patriotic emotions so in 2000 the number of total medals increased dramatically and the progress is still the case. It is difficult to explore the exact reason why sum of individual countries is better than the union but one logical reason is that sport is more than economics and politics it is a national and patriotic event.