Bend it Like FIFA: Corruption On and Off the Pitch

Managerial Finance, 42(9) 2016: 866-878

23 Pages Posted: 23 Jan 2016 Last revised: 1 Dec 2016

See all articles by Christopher Boudreaux

Christopher Boudreaux

Florida Atlantic University

R. Morris Coats

Nicholls State University

Gokhan Karahan

University of Alaska Anchorage - College of Business & Public Policy

Date Written: January 14, 2016

Abstract

Throughout 2015, many of FIFA’s (Fédération Internationale de Football Association) top executives were arrested, facing charges of bribery, fraud, and money laundering. On December 21, 2015, FIFA’s own Ethics Committee decided to ban its long-serving president, Joseph “Sepp” Blatter, for eight years. FIFA has long been plagued by allegations of bribery, but has, until recently, been able to get around them, like a well-curved free-kick shot. Being organized as a not-for-profit organization while generating large revenues, FIFA has enjoyed the services of highly paid executives and employees. For-profit firms are regulated largely through the market process, with stockholders having strong incentives to maintain close oversight and demanding transparency of transactions, and being subject to takeover bids. Not-for-profit organizations receive far less oversight, but are subject to regulation from both the country where they are incorporated and the country where they operate. As a monopolist in rule-making and holding a world championship tournament for the world’s most popular sport, FIFA executives and board members are in a position to demand payoffs and/or can punish its adversaries with its venue selection or by banning national teams from tournament participation.

Keywords: FIFA, Corruption, Institutions, Governance, Football (Soccer)

JEL Classification: L31, L83, K42, G39

Suggested Citation

Boudreaux, Christopher and Coats, R. Morris and Karahan, Gokhan, Bend it Like FIFA: Corruption On and Off the Pitch (January 14, 2016). Managerial Finance, 42(9) 2016: 866-878, Available at SSRN: https://ssrn.com/abstract=2719718 or http://dx.doi.org/10.2139/ssrn.2719718

Christopher Boudreaux (Contact Author)

Florida Atlantic University ( email )

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HOME PAGE: http://home.fau.edu/cboudreaux/web/

R. Morris Coats

Nicholls State University ( email )

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504-448-4922 (Fax)

Gokhan Karahan

University of Alaska Anchorage - College of Business & Public Policy ( email )

United States

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