Of Golf, Capitalism, and Socialism: An Empirical Analysis

Article excerpt

On July 13, 1977, Armen A. Alchian wrote the Wall Street Journal editorial "Of Golf, Capitalism, and Socialism." The question Alchian posed was why golf is predominant in capitalist societies but not in socialist ones. Alchian explained that golf is not a sport alone but also a lifestyle, "a manifestation of the essential human spirit" (Alchian, Collected Works of Armen A. Alchian, 2006). Because golf's rules and procedures require self-reliance and independence, it is a purely capitalistic sport. Alchian's article suggests an interesting hypothesis: is golf, in fact, more prevalent in capitalist countries? Using cross-sectional data from 74 countries we examine the relationship between the number of golf courses in each country and their Economic Freedom of the World Index (EFW) ranking.

Alchian argued that if golf were ever to emerge in communist ruled countries it would "surely be where the latent, but suppressed, capitalistic spirit is the strongest" (Alchian, Collected Works of Armen A. Alchian, 2006). He specifically noted the Czech Republic had seven courses prior to World War II and, therefore, it was not surprising that they were a "trouble-some people" (Alchian, Collected Works of Armen A. Alchian, 2006). Thus, we should not be surprised that the Czech Republic made such great economic transitions from the Soviet system. Gwartney and Lawson (Economic Freedom of the World: 2008 Annual Report, 2008) report prior to 1989 the Czech Republic had an estimated EFW ranking of 3 and an EFW ranking of 6.84, as of 2006 while Russia went from 3 to 5.91. The EFW data will determine if the former Soviet countries have experienced enough of a capitalist transition to see golf courses develop while controlling for GDP and population.

No previous studies have investigated the correlation between economic freedom and the sport of golf, which offers a unique contribution to the literature. Studies exist on the economics of golf and economic freedom as separate issues. The use of EFW in the literature has become pervasive for economic development, but few applications for sports economics. The literature on golf has been examined for resource use, tourism, and real estate development (Limehouse, Three Essays on the Golf Industry, 2005). Arthur et al. (American Journal of Economics and Sociology, 2009) and McCormick and Tollison (Public Choice, 2009) both use golf as a way to appraise economic institutions. Following Arthur et al. (American Journal of Economics and Sociology, 2009) the countries selected for the study were those available from www.worldgolf.com, and possess an EFW index ranking.

Our dependent variable is golf courses (Courses) per million individuals. …