The Economic Approach to Public Funding for the Arts

Rushton, Michael (2022): The Economic Approach to Public Funding for the Arts.

Abstract

This paper examines the rationales for public funding for the arts that arise out of economic models of markets, and market failure, specifically public goods and positive externalities. At the heart of the economic method is a reliance on consumer sovereignty: that individuals are the best judges of their own preferences and well-being, and that there is no disputing cultural preferences and tastes regarding consumption, and perceived benefits from public goods and externalities. Clarity is provided on what precisely would constitute externalities in the arts, and the challenges of trying to measure them. Consideration is also given to people seeking to change their own tastes, whether behavioral economics has implications for arts policy, and the concept of merit goods. The paper concludes by considering the rather stringent implications of the economic method for the practical allocation of arts funding.

• Item Type: MPRA Paper
• Language: English
• Keywords: cultural economics, public funding of the arts, merit goods
• Subjects: D - Microeconomics > D6 - Welfare Economics > D62 - Externalities; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z11 - Economics of the Arts and Literature

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