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The Freedom to Win: An Economic Predictor of EURO 2016

TAGs: Dr. Patrick Basham

Most punters and pundits agree that France is the probable winner of the EURO 2016 soccer tournament that kicks off Friday evening in Paris when the host nation entertains Romania. But, France isn’t necessarily the smart bet; in fact, France may be the riskiest ‘safe’ bet on the board.

The reality is that France’s – and every other nation’s – soccer fortune isn’t written in the stars, but in the stats, i.e. the economic stats. France enjoys home pitch advantage and, on paper, a very talented squad of players for Didier Deschamps to coach. Nevertheless, today’s release of the Democracy Institute’s EURO 2016 rankings suggests Les Bleus, currently the 16/5 favourite, are heavily over-wagered.

The Freedom to Win: An Economic Predictor of EURO 2016This is the 3rd edition of the Democracy Institute’s econometric soccer rankings. In 2010, ouranalysis of each World Cup nation’s level of economic freedom provided a reliable guide to their performance that year in South Africa. When successfully reprised at the 2014 World Cup in Brazil, the DI rankingswere a popular tool among gamblers and investors.

For EURO 2016, the Democracy Institute hasanalyzed the competing nations according to the data provided by the “Index of Economic Freedom,” the Heritage Foundation’s annual publication measuring economic freedom in 178 countries. Good coaching, a talented squad, and some luck are necessary for victory in a major soccer tournament, but they are often insufficient to the task. When these necessary variables are synthesized with a weighted economic freedom variable, the subsequent DI rankings add some essential science to the art of soccer wagering.

In terms of economic freedom, the Democracy Institute ranks France a shabby 19th of the 24 countries competing at EURO 2016 (she places just 75th globally). With superstars Paul Pogba and Antoine Griezmann leading the charge, the French should emerge comfortably from

These are the Ladbrokes odds available on 9 June 2016. Click here.

This measurement of economic freedom is based upon 10 quantitative and qualitative factors, grouped into four categories of economic freedom: 1. Rule of Law (property rights, freedom from corruption); 2. Limited Government (fiscal freedom, government spending); 3. Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and 4. Open Markets (trade freedom, investment freedom, financial freedom). Each of the ten economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these ten economic freedoms, with equal weight being given to each.See Terry Miller and Anthony R. Kim, “2016 Index of Economic Freedom,” Heritage Foundation: Washington DC, 2016.

Group A, which includes a long-shot, Romania (150/1), and a rank outsider, Albania (250/1). But, France may not go as deep in the tournament as conventional wisdom assumes.

The month-long tournament features round-robin games between the four teams within each of the six groups (“brackets”). Each group’s top two teams enter the first knockout stage (“Round of 16”), along with the four strongest third-placed teams. The Round of 16 is followed by an eight team quarter-final stage, and then a “Final Four”-style semi-final round with the winner decided in the final played outside Paris on July 10th.

The safest EURO 2016 bet is Germany. At 9/2, the world cup holders are an intimidating package: experienced coaching; some truly world class players; a winning tradition; mental toughness; and, pivotally, one of the world’s highest economic freedom scores. As the 17th freest economy in the world, Germany places 6th, with the fourth highest score, in the DI rankings.

The best long-shot bet, according to the DI rankings, may be the Republic of Ireland at 150/1. Although drawn with Italy (16/1), Belgium (10/1), Sweden (100/1) in Group E, which may prove to be the “Group of Death,” Ireland is nevertheless a decent prospect to advance to the knock out stages and perhaps go beyond the Round of 16. Ranked 2nd by DI (and the 8th freest economy worldwide), Ireland also will benefit from the underrated good cop/bad cop coaching duo of Martin O’Neill and Roy Keane.

Traditionally a favourite of both punters and pundits, Italy is not expected to advance beyond the quarter finals. And, that looks about right. With injuries ruling out two superior midfield players and carrying DI’s 4th lowest ranking, both Antonio Conte’s coaching acumen and the Juventus-anchored defence will be severely tested.

Boasting two of the continent’s top creative talents in Kevin De Bruyne and Eden Hazard, neighbouring Belgium is considered a possible, even probable, semifinalist by many observers. The DI rankings place the Belgians a modest 13th, which signals a quarter final appearance may be the extent of their success.

The least favoured team in this group, Sweden, could steal third place from the Italians. Zlatan Ibrahimovic’s superlative talents, possibly gracing an international tournament for the last time, in concert with his country’s 9th place DI ranking, should suffice to secure safe passage out of the group.

Three other unfancied nations – Iceland (125/1), Wales (80/1), and Northern Ireland (300/1) – also may be worth a serious punt in the early stages. None of them will win the tournament, but all three may survive the group stage and advance to the Round of 16.

As the most unlikely of participants, let alone success stories, Iceland is the smallest nation to ever qualify for a major tournament. Yet, careful gamblers should consider the Icelandic team’s superior performances during qualifying. Iceland is considered a massive long-shot, but her worldwide economic freedom score (20th) places her 7th in DI’s rankings.

Appearing in her first international tournament since 1958, and inspired by the Real Madrid galáctico, Gareth Bale, Wales has a solid chance of advancing from a competitive Group B that also features rivals and group favorites England, an enigmatic Russia, and the underestimated and thereby undervalued Slovakians. As a part of the UK, DI ranks Wales joint 3rd in the tournament, so the Welsh are one of the better long-odds bets to reach the Round of 16.

The tournament’s longest odds belong to Northern Ireland, her challenge made greater through cohabiting Group C with Germany, Poland, and Ukraine. Although the least-fancied team in France, Northern Irelandpossesses, courtesy of a resolute defence, the longest unbeaten streak of any nation entering the tournament, as well as the joint 3rd highest DI ranking (courtesy of her UK membership). The possibility of Northern Ireland, which is figuratively playing with house money, escorting both Germany and Robert Lewandowski’s undervalued 40/1 Poland (DI ranked 11th) into the Round of 16 is widelyoverlooked.

Both England and Switzerland should be magnets for money placed on teams on short-to-medium odds. Already one of the bookmakers’ choices to reach the semifinals, 8/1 England merits the lion’s share of the UK’s high global (10th) ranking for economic freedomand, consequently, joint 3rd place in the DI rankings. Such comparative economic vigour, in tandem with an offensively promising and energetic young squad, should give pro-England punterstangible reason for optimism.

Ditto for fans of Switzerland. Blessed by the likes of Arsenal’s new midfield fulcrum, Granit Xhaka, the Swiss may translate their 1st place in the DI rankings (4th globally) into a comfortable passage out of the group stages and potentially a run into the quarter finals, at least. As 50/1 outsiders, wagering on any level of Swiss success is an attractive proposition.

Other undervalued teams are Austria (40/1) and the Czech Republic (100/1). The Democracy Institute ranks the Austrians 10th. We consider them a strong prospect to advance out of Group F alongside Iceland, and ahead of Cristiano Ronaldo’s Portugal. The latter is the bookmakers’ 7th favourite at 16/1, but DI ranksPortugal a lowly 18th.

The Czech team, led by an aging yet still-influential Tomáš Rosický, are massive underdogs, in no small part because Group D also features defending champions Spain (5/1) and Croatia (25/1), as well as Turkey (66/1). Buttressed by their 8th place on the DI rankings, the Czechs may surprise the experts by reaching the Round of 16.

In contrast toits tournament nadir at the 2014 World Cup, Spain (ranked 12th by DI) will not fall at the first hurdle; however, the quarterfinals may be the Spanish zenith. Croatia, meanwhile, doeshave Luka Modric, but she also has the 103rd economic freedom ranking globally, which translates into DI’s 3rd lowest overall ranking. Unfancied Turkey will be spirited and physically exacting on their opponents, but they carry the burden of being DI’s 5th lowest-ranked team in France.

Russia (66/1) and Ukraine (80/1) are another pair ofunattractive long-odds teams. Neither nation will be a pushover of course, and the Russians surely cannot perform as dourly as under Fabio Capello’s direction at the last World Cup. Nevertheless, the lack of an attacking spark and the 2nd lowest DI ranking suggests Russia’s stiff odds are well-judged. A Ukrainian team featuring Dynamo Kiev’s skillful Andriy Yarmolenko will give opponents pause for thought, but Ukraine’s position at the very bottom of the DI rankings is probably too deep a hole out of which to climb.

At the outset of EURO 2016, therefore, only one thing is certain. A healthy dose of the free market would provide more national teams with the tools to live up to their sports billing.

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