The elimination of Germany from the group stages of the World Cup is a remarkable break with history. Germany has reached the elite eight of every World Cup since 1966. Germany appeared in seven of the last thirteen World Cup finals and won it three times. Even more remarkably, the World Cup Final on July 15 will be only the second since 1966 not to include one of Germany, Italy or the Netherlands. At least one of these teams has reached the quarter final stages (or equivalent, given that the competition format has changed) in the last 13 World Cups, at least two have reached that stage on ten out of thirteen occasions and on three occasions all three did. Yet this year Italy and the Netherlands did not even qualify for the competition, and Germany went out bottom of their group after losing two out of three games.
While these three European teams have struggled in this World Cup cycle the rest of Europe has prospered. Three quarters of the slots in the Round of 16 have been taken by European teams. So far European teams have lost only seven of the 30 games they have played against non-European opposition. These defeats are Germany’s brace, as well as losses by Iceland, Russia, Serbia and two also for Poland. Yet Iceland managed a draw against Argentina and Switzerland with Brazil. Equally surprising, Croatia buried Argentina 3-0. Treating ties as half a win, Europe’s win percentage at this World Cup stands at 68%, South America at 63% and no other continent is above 33%.
This dominance is nothing new. The European and South American Confederations have always dominated the World Cup. Since 1950 no outsider has ever reach a World Cup final, only one team has reached a semi-final (South Korea in 2002) and only nine teams have reached the quarter finals (7% of total number of quarter finalists). In the 1960s only about 10% of slots at the tournament went to outsider nations, but since then their total share has risen to around 40% (in this world cup 13 of the 32 slots went to the three other confederations: Asia, Africa and North/Central America). In the round of sixteen there will be only two (13%) – Mexico and Japan – neither of whom, if the bookmakers are to be believed, are likely to reach the quarter finals. For the first time since the Round of 16 was inaugurated in 1986 no African nation has reached this stage.
So on the one hand the periphery of Europe seems to be doing better than its historically dominant axis, while the traditionally dominant continents seem entrenched. How can we account for this? In joint research with Melanie Krause from the University of Hamburg using data on about 27,000 international soccer matches played between 1950 and 2014 we have found that there is a tendency for weaker nations to catch up with the stronger nations – analogous to the economic notion of convergence. Just as poorer nations can catch up with richer nations by a program of investment and imitation, so weaker soccer nations can catch up with the stronger ones by investing in basic skills. Indeed, while evidence for convergence among international economies is patchy, evidence for the soccer nations is actually pretty strong.
However, we also find that there is what some economists have called “the middle income trap”. When it comes to the national economy, what raises your standard of living from the bottom to the middle (large scale investment in capital to make workers more productive) is different from what raises you from the middle to the top (innovation and creativity). Many middle income nations seem to find it difficult to make the transition. So also it seems to be with soccer: weaker nations can eliminate basic errors but developing world class talent has proved elusive. Europe and South America were regularly playing international soccer and developed national league infrastructures by the time of the First World War, most other continents did not start in earnest until after the Second World War. While there has been some catch-up, the first mover advantage of Europe and South America seems to have persisted.
Being first doesn’t always work – there are almost no textile mills in Lancashire any more, Detroit long lost its dominance of the car industry and French wines are not what they were. But when first movers also go on to create a network the advantage can be self-sustaining. Think of the financial markets of London and New York, or the tech industry in silicon valley. Barings and Lehman Brothers may be long gone, IBM may be a shadow of its former self, but the companies that grew up around them prospered. Much the same thing seems to be happening in European soccer. In the 1960s Germany, Italy and the Netherlands established themselves as the core of European soccer – most innovation and creativity came from these three nations. Over the years other European nations benefitted from constant exposure- either in competition or by hiring players and coaches for teams in their own national leagues. Central European nations such as Croatia that were buffeted by political upheavals in the 20th century were able to re-emerge and integrate into the European system. Spain, whose national team had long underperformed was drawn more closely into the European network. Even insular England has started to feel more cosmopolitan.
So the Germans, Dutch and Italians may be disappointed by their showing at this World Cup, but they can reasonably claim that their spirit lives on in the other European nations. And anyway, if history is anything to go by, they will soon be back.