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Determinants of Public Cultural Expenditures: An Exploratory Time Series Analysis for Austria

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  • Michael Getzner
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    Abstract

    Austria calls itself a ``cultural nation'' as the arts, the performing arts (theaters) and museums, in particular, play an important role in public debate. However, the question arises as to whether public cultural expenditures as an indication of the significance of cultural policy are really as important when compared to other policy fields as political parties and the government try to suggest. A time series of public cultural expenditures for the period from 1967 to 1998 is taken as a basis for testing econometrically whether public expenditures (measured primarily as the ratio to GDP) follow a growth path. Based on tests for the stationarity of the time series of cultural expenditures in Austria, there are empirical indications that cultural expenditures, gross domestic product (GDP) and the relative price index (GDP and government expenditures) are cointegrated. Further econometric estimations (error-correction models) show that cultural expenditures increase with growing GDP but are vulnerable to short term fluctuations. Additionally, ``Baumol's cost disease'' adds to the long-term growth of cultural expenditures. In the past the growth path of cultural expenditures has been stable and independent of the ideology of ruling parties, the form of government and political business cycles. Copyright Kluwer Academic Publishers 2002

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    Bibliographic Info

    Article provided by Springer in its journal Journal of Cultural Economics.

    Volume (Year): 26 (2002)
    Issue (Month): 4 (November)
    Pages: 287-306

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    Handle: RePEc:kap:jculte:v:26:y:2002:i:4:p:287-306

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    Web page: http://www.springerlink.com/link.asp?id=100284

    Related research

    Keywords: cultural policy; public choice; public cultural expenditures; time series analysis;

    References

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    1. Michael Getzner & Ernst Glatzer & Reinhard Neck, 2001. "On the Sustainability of Austrian Budgetary Policies," Empirica, Springer, vol. 28(1), pages 21-40, March.
    2. Frey, Bruno S., 1996. "Has Baumol's Cost Disease disappeared in the performing arts?," Ricerche Economiche, Elsevier, vol. 50(2), pages 173-182, June.
    3. Bruno Frey, 1999. "State Support and Creativity in the Arts: Some New Considerations," Journal of Cultural Economics, Springer, vol. 23(1), pages 71-85, March.
    4. Seaman, Bruce A, 1981. "Economic Theory and the Positive Economics of Arts Financing," American Economic Review, American Economic Association, vol. 71(2), pages 335-40, May.
    5. Austen-Smith, David, 1984. "Subsidies to the Arts with Multiple Public Donors," The Economic Record, The Economic Society of Australia, vol. 60(171), pages 381-89, December.
    6. J. Schuster, 1999. "The Other Side of the Subsidized Muse: Indirect Aid Revisited," Journal of Cultural Economics, Springer, vol. 23(1), pages 51-70, March.
    7. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    8. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
    9. Schulze, Gunther G & Ursprung, Heinrich W, 2000. " La donna e mobile--Or Is She? Voter Preferences and Public Support for the Performing Arts," Public Choice, Springer, vol. 102(1-2), pages 131-49, January.
    10. Michael Hutter, 1996. "The impact of cultural economics on economic theory," Journal of Cultural Economics, Springer, vol. 20(4), pages 263-268, December.
    11. Günther Schulze & Anselm Rose, 1998. "Public Orchestra Funding in Germany – An Empirical Investigation," Journal of Cultural Economics, Springer, vol. 22(4), pages 227-247, December.
    12. Trine Hansen, 1997. "The Willingness-to-Pay for the Royal Theatre in Copenhagen as a Public Good," Journal of Cultural Economics, Springer, vol. 21(1), pages 1-28, March.
    13. John W. O'Hagan, 1996. "Access to and Participation in the Arts: The Case of Those with Low Income/Educational Attainment," Economics Policy Papers 961, Trinity College Dublin, Department of Economics.
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    Cited by:
    1. Niklas Potrafke, 2013. "Evidence on the political principal-agent problem fromvoting on public finance for concert halls," Ifo Working Paper Series Ifo Working Paper No. 164, Ifo Institute for Economic Research at the University of Munich.
    2. Michael Getzner, 2004. "Exploring Voter Preferences in Cultural Policy: A Case Study for Austria," Empirica, Springer, vol. 31(1), pages 27-42, March.
    3. Werck, Kristien & Heyndels, Bruno & Geys, Benny, 2007. "The impact of central places on spatial spending patterns: evidence from Flemish local government cultural expenditures," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-10, Social Science Research Center Berlin (WZB).
    4. van der Ploeg, Frederick, 2006. "The Making of Cultural Policy: A European Perspective," Handbook of the Economics of Art and Culture, Elsevier.
    5. Bertacchini Enrico & Dalle Nogare Chiara, 2013. "Public provision vs outsourcing of cultural services: evidence from italian cities," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201312, University of Turin.
    6. Bernardino Benito & Francisco Bastida & Cristina Vicente, 2013. "Municipal elections and cultural expenditure," Journal of Cultural Economics, Springer, vol. 37(1), pages 3-32, February.
    7. Chiara Dalle Nogare & Matteo Galizzi, 2011. "The political economy of cultural spending: evidence from Italian cities," Journal of Cultural Economics, Springer, vol. 35(3), pages 203-231, August.
    8. Lars Håkonsen & Knut Løyland, 2013. "Local government allocation of cultural services," ACEI Working Paper Series AWP-06-2013, the Association for Cultural Economics International, revised Oct 2013.
    9. Douglas Noonan, 2007. "Fiscal pressures, institutional context, and constituents: a dynamic model of states’ arts agency appropriations," Journal of Cultural Economics, Springer, vol. 31(4), pages 293-310, December.

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