Let FIFA be

Is it the business of the US Government, indeed any government to police FIFA? Lets start with the legality of bribing of FIFA officials? Under a variety of laws related to commercial bribery, bribing them is indeed illegal. Were I to bribe the CEO of a public company to sell me, below cost, the wares of her company, it is right and proper for the shareholders to have the ability to punish the CEO. However, is it the obligation of the Government to police the CEO for the shareholders? When a FIFA spokesperson announces that it is the damaged party in this, why aren’t they mounting the investigation and bringing charges against those accused of accepting bribes?

When someone burgles my house, the state, upon being informed will mount an investigation. In the event they should identify the burglar the State will, on my behalf, prefer charges and prosecute. The State does not charge me a `user fee’ that is directly tied to the efforts it has made on my behalf. The expenses of the State are covered through my taxes. Were each individual to bear the full costs of investigation, prosecution and punishment, few would elect to do so unless the private gains exceeded the costs. This in a nutshell is the public goods argument for why the Government should police FIFA.

Government resources, however, are limited. Not every crime reported is investigated with equal fervor. Not every suspect is pursued with equal vigor. We give the Government the discretion to decide how best to provide the `public good’. What is the argument for prioritizing the prosecution of FIFA officials for accepting bribes? A New Republic  article by John Affleck suggests it is to preserve the `integrity’ of the game. I suppose the Bravo network is next in line for attention to preserve the `integrity’ of reality TV. Affleck goes on to quote Transparency International:

“Sport is a multi-billion dollar business engaging billions of people. It is also a global symbol of fair play and a source of great joy for many people on this planet, whether participating, attending or watching events,” the group’s introductory statement says. “With so much public involvement, political influence and money at stake, corruption remains a constant and real risk. Mounting scandals around match-fixing, major events and elections, and systemic deficiencies in sports governance are now so undermining public trust that it is reaching a tipping point.”

Billions of people can vote with their eyeballs. Read a book, watch Real Housewives of Atlanta, have sex, see a play. There are many ways in which we can spend our time while hanging around waiting to die. Soccer is just one. If Soccer is in danger of losing its audience surely this is a powerful incentive for FIFA `clean up’. The private benefits probably exceed the private costs of enforcement.

What if FIFA itself suffers from a collective action problem? Each official by themselves would prefer not to take bribes, but given everyone else is doing so, what is one to do? This is easily solved. Allow FIFA officials to be bribed. Instead of running beauty contests to decide where to hold FIFA events, auction off the right to the highest bidder. This can be done in two ways. Allow each FIFA official with a vote to auction off their vote to the highest bidder. Or, do away with the officials altogether and have countries bid directly for the right to hold FIFA events. Full transparency, no bribery and FIFA may be richer than before!

Penn State’s Intellectual Property Auction

Penn state runs auctions to license its intellectual property. For each license on the block there is a brief description of what the relevant technology is and an opening bid which I interpret as a reserve price. It also notes whether the license is exclusive or not. Thus, the license is sold for a single upfront fee. No royalties or other form of contingent payment. As far as I can tell the design is an open ascending auction.