Between the Green Pitch and the Red Tape: The Private Legal Order of FIFA

Abstract

FIFA, football's (or soccer's, as it is known in some countries) world governing body, has long been associated with the World Cup and, lately, the corruption scandal. Less known is FIFA's success in building a legal order that competes with public orders. This study explains how and why this private legal order has succeeded in governing the behavior of the involved actors by keeping them away from regular courts. We argue that the ability of the order to offer what other governance modes could not is the key: FIFA, as a transnational private authority, offers harmonized institutions that apply across national borders and in many cases are better accustomed to the needs of the involved parties than their state-made alternatives, which often are based on one-size-fits-all approach and lack certainty of application. FIFA's rules increase the gains of clubs and prominent footballers. And while the interests of some other involved parties, less known players in particular, might have been better served by the application of formal state laws, the established equilibrium discourages deviation. The results contribute to the better understanding of alternative modes of supplying institutional design, particularly by illustrating how private orders function in the environment where reputation plays limited role.

Keywords: Private ordering, self-governance, organizational behavior, labor contracts, trans-national private regulation, FIFA, football

JEL Classification: K00, D23, J41, Z20, Z22