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Capitalisn’t: How Lobbying Led to Crony CapitalismIs Public Spending on the Arts Worth the Expense?
- March 27, 2019
- CBR - Economics
The economic crisis hit many sectors hard in Europe, including the arts, which “is considered by many a non-essential service,” according to a recent report on public spending on culture in Europe. “Thus, since 2008 several countries have drastically eliminated aid policies for the cultural sector and their subsidy plans for cultural institutions.”
However, as the report notes, while some countries such as Spain and Greece slashed public funding for arts and culture, others, mainly in the north, increased theirs.
Considering Europe’s strong artistic history but contemporary economic challenges, is public spending on arts worth the expense? Chicago Booth’s Initiative on Global Markets polled its European IGM Economic Experts Panel and found that more economists than not say public spending on the arts creates benefits that exceed the funding amount.
“The nonmonetary benefits in Europeans’ preference functions far exceed any deadweight costs,” responded Christopher Pissarides of the London School of Economics.
However, far more economists expressed uncertainty when asked if additional public spending on the arts in Europe would create incremental benefits that would justify the spending.
Nicholas Bloom, Stanford
“I worry about inequality—the consumers of the arts tend to be wealthier and more educated.”
Response: Uncertain
Luigi Guiso, Einaudi Institute for Economics and Finance
“Europe has an immense endowment that creates lots of spillovers but needs maintenance.”
Response: Strongly agree
Richard Portes, London Business School
“I am president of a small foundation that gives to the arts. I know what that funding means.”
Response: Strongly agree
Pol Antràs, Harvard
“I am not sure whether additional spending is needed, or whether taxes should be lowered, but net subsidies seem low.”
Response: Uncertain
Rachel Griffith, University of Manchester
“Difficult to answer for Europe as a whole—there are big differences in states’ size and funding of arts across Europe.”
Response: Uncertain
Jan Pieter Krahnen, Goethe University Frankfurt
“Given the high level of public spending on the arts in Europe, we may have reached the point of negative marginal returns in some countries.”
Response: Uncertain
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