A Handbook of Cultural Economics, Second Edition
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A Handbook of Cultural Economics, Second Edition

Edited by Ruth Towse

The second edition of this widely acclaimed and extensively cited collection of original contributions by specialist authors reflects changes in the field of cultural economics over the last eight years. Thoroughly revised chapters alongside new topics and contributors bring the Handbook up to date, taking into account new research, literature and the impact of new technologies in the creative industries.
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Chapter 52: Public Support

Bruno S Frey


Bruno S. Frey When cultural economists look at public support for the arts, they distinguish between two aspects: the positive issue where one analyses the extent of support by the government, and the normative issue whether or not the arts should be publicly supported and, if so, to what extent. In the second case, the cultural economist wants to inform the public about an appropriate policy, a welfare-enhancing public policy towards the arts. How does government support the arts? Throughout history, governments have been heavily involved in the arts. Table 52.1 provides an overview of direct public spending on the arts in various countries in 2007. Table 52.1 should be interpreted with great care because what counts as ‘arts expenditure’, and what falls in the domain of ‘government’, differs considerably between the countries listed. Nevertheless, the table shows widely different amounts of direct public expenditures for the arts. Russia, Greece and Ireland spend much less, and Norway and Denmark substantially more, than the other countries shown. The source of public support also differs widely. Thus, for example, in Denmark 64 per cent comes from the central government, while in Germany it is only 13 per cent, the bulk coming from the Länder and cities. It is important to realize that a substantial part of the public support for the arts is given in an indirect way, by so-called ‘tax deductions’. Individuals’ and firms’ gifts to the arts may be exempt from tax. Hence the higher the applicable (marginal) tax...

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