The rankings do tend to overvalue Europe, while South America & Africa are undervalued because of Europe’s qualification systems.

Bare with me. UEFA organizes qualification exactly the same for both the Euro and the World Cup: everyone plays a boatload of games (usually 10+) against each other in about 8 seeded groups. This system has several implications:

First, top teams (Spain, Germany, etc.) are guaranteed a good dose of victories every cycle, as they are seeded with plenty of minnows. POINTS!

The European minnows are playing a lot of games against each other and against top teams (IIRC, you can only win points in a match, not lose them). They might not be beating the Nederlands, but they do get shots at each other, which means POINTS!

Now there is a positive feedback effect here: even the minnows are playing a good number of winnable matches and keeping a decent ranking on the global scale, so when the top European teams beat them, it means MORE POINTS for Spain, Germany, etc.

Similarly, since teams from different regions rarely meet, these possible points–and the possibility of earning points against higher ranking opposition–tends to keep these points within UEFA.

This doesn’t, by any means, mean that the top European teams aren’t among the best, but that the rankings do a poor job of fairly measuring teams across regions. Which is why Paraguay, Chile, Cote D’Ivoire, Ghana, etc. get short changed. The qualification system in Africa funnels out the weakest teams quickly and basically the strongest African teams fighting for spots. CONMEBOL itself is so small (and so talented) that the teams have to fight tooth and nail for every point. They don’t get six or eight matches against far lesser opposition (save Peru this cycle).

None of this would matter if the rankings didn’t have any effect on things, but they are a major factor of World Cup seeding… The comparative qualification systems make it very difficult for non-European teams to get seeded.

Imagine the rankings if Cote D’Ivoire (with Drogba, the Toures and oh so much talent) was put in a 10 country group for qualifying (50 African countries/5 qualification spots), where while it might have had to contend against Mali or Algeria, they had a good 12 matches against the minnows of Africa?

*breathe*