The FIFA Presidential election takes place this afternoon. Sepp Blatter is odds-on to win. This despite the fact FIFA is engulfed in crisis.
I spoke to friends yesterday who asked me how is it that Mr Blatter continues to be elected as President despite the huge reputational damage done to FIFA over the past number of years. For the answer we can turn to a 2005 article in the Journal of Economic Perspective by Stanford Professor Barry Weingast called The Constitutional Dilemma of Economic Liberty.
This paper provides an explanation as to how an incumbent can remain in power in the face of widespread opposition. As things stand, Mr Blatter will win the election thanks to support he receives from both the Confederation of African Football (CAF) and Asian Football Confederation (AFC). It is almost impossible to prevent the current President from remaining in power unless those opposed to his rule convince either the CAF or AFC member associations to abandon him. Neither so far have. It must be in their interests to keep Mr Blatter in power.
Weingast's paper describes this scenario. It starts by claiming that most constitutions fail. This happens when those in power abuse citizen rights, rule by decree or call off an election. Because no external enforcement mechanism exists for most constitutions, success requires that constitutions be self-enforcing in the sense that officials have an incentive to honour constitutional provisions. Herein lies FIFA's problem. Perverse incentives exist.
Weingast poses the question how do some constitutions provide incentives for political officials to abide by the constraints announced in the constitution?
Why is this crisis engulfing FIFA and not other sporting organisations? The answer lies with the member associations FIFA govern. If associations can coordinate their reactions against FIFA in the face of potential transgressions, they can provide officials with incentives to honour association rights. However, two problems exist. First, coordination among associations may be difficult or even impossible, because they may disagree along several dimensions. Secondly, Mr Blatter has been exceptionally politically astute, using a divide-and-conquer strategy to benefit some members at the expense of others.
Imagine the following scenario. The President wishes to retain power. In order to do so he needs support from one of two confederations; UEFA or CAF. The President has three options open to him. 1) Honour both UEFA and CAF. 2) Transgress against either UEFA or CAF. 3) Transgress against both UEFA and CAF. Given that he needs support from one of the two, Option 3) is unlike as it will probably result in him losing power. Option 1) is also unlikely as he will have to share his gains with both UEFA and CAF. Therefore, Option 2) is chosen; in this case the President transgresses against UEFA and shares some of the gains with CAF. The matrix below models this. The Nash Equilibrium occurs in the top left-hand box. After today, the Nash may well be the top right-hand box. UEFA may ask themselves why did we bother?