A Handbook of Alternative Theories of Public Economics
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A Handbook of Alternative Theories of Public Economics

Edited by Francesco Forte, Ram Mudambi and Pietro Maria Navarra

This comprehensive and thought-provoking Handbook reviews public sector economics from pluralist perspectives that either complement or reach beyond mainstream views. The book takes a comprehensive interdisciplinary approach, drawing on economic elements in the fields of philosophy, sociology, psychology, history and law.
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Chapter 18: Cognitive dissonance, efficient and inefficient rent seeking and public aid to the movies

Francesco Forte and Michela Mantovani


The following section discusses the relation between cognitive dissonance and rent seeking with particular reference to the dichotomy between inefficient versus efficient rent seeking, for the private supply of (quasi) public merit goods. Section 3 analyzes the European Union principles relating to the cultural exception as applied to the movie industry and the decline of the Italian movie industry under the competition of the new media of mass culture. This section also analyzes the state aid to the movies in Italy by the Fund for the Performing Arts (FUS) from 1985 to 2010, showing its failures both from the point of view of the European objectives of protecting cultural identity by the diffusion of Italian movies and from that of promoting within the public culturally qualified movies. The fourth section considers two other sources of public aid experienced in Italy, in the same period, more oriented to the market: tax credits and regional and local aid for the production of movies valorizing Italy's cultural and environmental values and local ways of life. Product placement is also analyzed here to show that the adoption of this new non-conventional source of finance may substantially sustain the supply of cultural goods by market means. Furthermore, the adoption of this techniques could significantly improve these local policies of 'cine-tourism', reducing the occurrence of wasteful rent seeking.

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