{"id":2791,"date":"2022-06-07T17:45:23","date_gmt":"2022-06-08T00:45:23","guid":{"rendered":"https:\/\/www.artsjournal.com\/worth\/?p=2791"},"modified":"2022-06-09T15:27:03","modified_gmt":"2022-06-09T22:27:03","slug":"book-diary-june-7-new-working-paper-on-the-economics-of-arts-funding","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2022\/06\/book-diary-june-7-new-working-paper-on-the-economics-of-arts-funding\/","title":{"rendered":"Book Diary – June 7 – New Working Paper on the Economics of Arts Funding – Updated June 9 with a good question"},"content":{"rendered":"\n
\"\"<\/a><\/figure>\n\n\n\n

Still a work in progress, but a draft essay summarizing the economic approach to public funding for the arts is available here<\/a> for (free) download.<\/p>\n\n\n\n

Public goods and externalities, there’s no disputing tastes, or maybe there is, nudges, merit goods, Leonard Bast, The Children of Men<\/em>, contingent valuation, and an attempt to define neoliberalism.<\/p>\n\n\n\n

I finish by citing this most highly recommended essay<\/a>:<\/p>\n\n\n\n

David Throsby (2003) gets to the heart of the issue: there might be \u201ccultural value\u201d in the arts,  \u201ctheir aesthetic properties, their spiritual significance, their role as purveyors of symbolic meaning, their historical importance, their significance in influencing artistic trends, their authenticity, their integrity, their uniqueness,\u201d that cannot be captured in estimates of \u201ceconomic value\u201d even with the most sophisticated techniques for determining the monetary values the public places on public goods and externalities. This means arts-policy makers will sometimes face a trade-off between stated economic values, calculated through the methods described in this chapter, and other values that exist outside of the economic method.<\/p><\/blockquote>\n\n\n\n

There’s not much talk of equity here – it gets its own treatment in my next entry…<\/p>\n\n\n\n

UPDATE (June 9): A friendly reader writes:<\/p>\n\n\n\n

In the middle of page 11, you state:\u00a0<\/p>

“It is important that the subsidy actually do something in terms of increasing the activity which is presumed to generate the externality;\u00a0a grant to an orchestra that is mostly wasted on unnecessary internal expenditures, and that does not affect the artistic output of the orchestra in any way, is pointless, is not fulfilling the purpose of the subsidy.”<\/p>

How might you define an “unnecessary\u00a0internal expenditure” in this case?\u00a0Do you feel general operating grants would qualify as\u00a0“unnecessary\u00a0internal expenditures” since it might not be tied a specific activity\/artistic output to generate an externality? General operating I guess\u00a0could perhaps affect the output, so perhaps that would ‘ok’ under this definition. Do you have specific examples in mind of what would be\u00a0unnecessary\u00a0internal expenditures, perhaps that you’ve seen\u00a0organizations\u00a0use subsidies for in the past?<\/p><\/blockquote>\n\n\n\n

This points to something I should make clearer. Suppose a grant is being made to a local theatre company, on the rationale that there is a positive spillover effect from its activities: it makes for a better community, people value its history and want it to be maintained for future generations, it is very innovative and advances the art of theatre, or a combination of all these.<\/p>\n\n\n\n

A grant is given on the grounds that the funds will produce some outcome<\/em>: the company will be able to do more plays, or it could afford to do performances with higher production quality, or expand its outreach activities into the community, or it can take some risks with innovative new works, or it could hire some office staff that allows the artistic talent to better focus on their art … something<\/em>. The company is being subsidized so that it can do more on some quantity or quality axis. <\/p>\n\n\n\n

Suppose the funds were spent in ways that benefitted the employees of the company, but did not affect what they do in any way we could observe – simply an increase in perquisites. Then we would have to ask why subsidize at all.<\/p>\n\n\n\n

Arts council grants are not transfer payments to artists and arts administrators. They are a payment meant to drive some sort of result. It doesn’t have to be quantifiable – I remain a devotee of old<\/em> public management – but it has to be some kind of outcome.<\/p>\n","protected":false},"excerpt":{"rendered":"

Still a work in progress, but a draft essay summarizing the economic approach to public funding for the arts is available here for (free) download. Public goods and externalities, there’s no disputing tastes, or maybe there is, nudges, merit goods, Leonard Bast, The Children of Men, contingent valuation, and an attempt to define neoliberalism. I […]<\/p>\n","protected":false},"author":3,"featured_media":2793,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-2791","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/06\/wonderboys.jpg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-J1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":3005,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/04\/why-public-funding-for-the-arts-a-personal-view\/","url_meta":{"origin":2791,"position":0},"title":"Why Public Funding for the Arts: A Personal View","author":"Michael Rushton","date":"April 18, 2024","format":false,"excerpt":"I\u00a0wrote a book\u00a0looking at how different ways of moral and political theorizing drew different conclusions regarding whether the state should, or should not, subsidize the arts. At the very end of the book I give something of a personal view. There is a review circulating that is terribly confused about\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/04\/image.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":2864,"url":"https:\/\/www.artsjournal.com\/worth\/2023\/03\/new-rushton-working-paper-on-equality-and-public-funding-for-the-arts\/","url_meta":{"origin":2791,"position":1},"title":"New Rushton Working Paper on Equality and Public Funding for the Arts","author":"Michael Rushton","date":"March 26, 2023","format":false,"excerpt":"A short, low-tech paper available for free download here on SSRN. The abstract: Suppose a reasonably wealthy country did not have an arts council that granted public funds to select artists and arts organizations. Would it be advisable to create one? One reason to do so, which comes from economic\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/03\/Rushton-headshot.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":3049,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/07\/does-it-matter-if-the-subsidized-arts-are-mostly-attended-by-the-well-off\/","url_meta":{"origin":2791,"position":2},"title":"Does it matter if the subsidized arts are mostly attended by the well-off? (updated)","author":"Michael Rushton","date":"July 24, 2024","format":false,"excerpt":"I have a new paper out, \u201cThe pursuit of equality through public funding for the arts\u201d, in\u00a0Innovating Institutions and Inequities in the Arts, edited by Joanna Woronkowicz and Doug Noonan.1 To explain what it is about, let me start with a completely different policy field: reducing the use of fossil\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image-1.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image-1.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image-1.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image-1.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/07\/image-1.png?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":3768,"url":"https:\/\/www.artsjournal.com\/worth\/2025\/04\/what-do-to-with-the-nea-pull-the-plug\/","url_meta":{"origin":2791,"position":3},"title":"What do to with the NEA? Pull the plug?","author":"Michael Rushton","date":"April 11, 2025","format":false,"excerpt":"Two opinion pieces were published this week giving different conservative takes on what to do with the NEA. I\u2019ll talk about Mark Bauerlein\u2019s\u00a0New York Times\u00a0Op-Ed in the next post; here I look at the Cato Institute\u2019s Ryan Bourne\u2019s briefing paper \u201cEnd the National Endowment for the Arts\u201d. To begin I\u2019ll\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2025\/04\/image.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1499,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/09\/local-arts-funding-and-urban-design-responses\/","url_meta":{"origin":2791,"position":4},"title":"Local arts funding and urban design: responses","author":"Michael Rushton","date":"September 8, 2014","format":false,"excerpt":"My thanks to those who took the time to comment on my most recent post. As usual - and this is for the good! - discussion went in unexpected directions. One commenter wrote, in response to my line that local government arts funders should respond to local tastes: Should \u201ctaste\u201d\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"we get letters","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/postbox.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/postbox.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/postbox.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/postbox.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/postbox.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/postbox.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":2753,"url":"https:\/\/www.artsjournal.com\/worth\/2022\/05\/book-diary-may-13-can-a-neoliberal-support-public-funding-for-the-arts\/","url_meta":{"origin":2791,"position":5},"title":"Book Diary – May 13 – Can a Neoliberal support public funding for the arts? – Updated","author":"Michael Rushton","date":"May 13, 2022","format":false,"excerpt":"In the field of cultural affairs I often come across papers that use the word \"neoliberalism\", virtually always describing a bad thing, but with its precise meaning pretty vague - even when I ask as a friendly question what the presenters mean they are not quite sure. In arts policy,\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/05\/neoliberalism.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/05\/neoliberalism.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/05\/neoliberalism.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/2791","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=2791"}],"version-history":[{"count":3,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/2791\/revisions"}],"predecessor-version":[{"id":2796,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/2791\/revisions\/2796"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media\/2793"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=2791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=2791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=2791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}