The Economic Approach to Public Funding for the Arts

Michael Rushton

MPRA Paper from University Library of Munich, Germany

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.

Keywords: cultural economics; public funding of the arts; merit goods (search for similar items in EconPapers)
JEL-codes: D62 Z11 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-cul
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:113405

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