The Transition of the State’s Role
in Cultural Financing
caused by the Financial Crisis
UNEECC 2011
Antwerpen, Belgium
Presenter: Tóth, Ákos PhD
Kecskemét College, Hungary
The Motivation of the Research
• The financial crisis started in 2008 forced
changes in the role of the state in subsidizing
and coordinating the cultural sector.
• There are differences in the methods of the
transition.
• No same cultural financing methods.
• No real EU level cultural financing.
Puzzle
• Why some Member States using quite similar
cultural financing model are not reaching the
same level of efficiency in making reforms in
the role of the State caused by the crisis?
• Why some Member States using contradictory
cultural financing models are able to reform
the role of the State with success?
Hypothesis
• We argue that the role of the state is still
determinant, but the growth of the cultural
sector has been affected by the form and
quality of that state intervention, not by the
volume of direct government expenditure on
the sector.
Methodology
• Comparative economics – the institutions are
in the focus.
• Cross-national approach.
• France – coordinated model; the United
Kingdom – liberal model; Hungary –
coordinated but hybrid model as case studies.
• Constraints: not all data available yet.
Grouping of the Member States
• The existence of independent arts councils,
• the role of the private sector in the financing of
culture,
• the existence of competition for government
subsidies,
• the development and the efficiency of the
taxation system on culture,
• the development and the role of the non-profit
sector.
• The existence of the term „arm length” in the
national cultural policy strategies.
France – Facts and Details
• Increase of government subsidy on culture
• Household expenditure (including culture)
increased + 1.8 %.
• Cinema attendance increased +5.7 %.
• Philanthropy of the Private Sector: -14%,
although till 2008 very rapid increase in
philanthropy.
(Source: Inkei, 2010; Ministère de la Culture et de la Communication, 2011)
France – Facts and Details
• The liberal cultural financing methods just
started to be accepted by the private sector
and the society when the crisis stopped the
process.
• Still very homogeneous system with
centralisation in the focus.
• The laws are enforced (1% for culture from the
budget).
UK – Facts and Details
• Decline in government subsidy since 2005.
• 21 million GBP cut from Arts Councils in 2009.
• Plus 22 million GBP for culture not related to the
2012 Olympic Games from the Lottery.
• 2006–2019 – an average 28 pence from every
Pound for culture not related to the 2012
Olympic Games from the Lottery.
• DCMS budget -25% in four year average between
2010-2014. Increase in the first 2 years, then
decline to 1.1 Million GBP. (market-oriented
aspect)
UK – Facts and Details
• A further 40 million GBP ‘Sustain fund’ for arts
organisations suffering because of the economic
downturn.
• Household expenditure including culture (+0.7%)
• Cinema attendance +5.6%.
• Private Sector philanthropy -6% in 2008/2009
(Mermiri, 2010)
• “the private sector will recover faster than the public
sector, so private investment in culture must not only
be maintained but maximised” (Mermiri, 2010)
• Education (schools) and international development
funding will be protected.
Hungary – Facts and Details
• 4.4 million Euro cut from culture.
• Re-centralisation.
• Reforms at the National Cultural Fund (arm
length body).
– New leader
– New structure - 9 collegiums
– More effective performance to decrease overhead
costs
• 90% of Lottery is for culture since 2009.
• Crony Capitalism, no transparency, lack of trust.
• No real strategy, full of improvisation.
Conclusions
• If a model is homogeneous and don’t
improvise, the reforms can end in success.
• If a model is hybrid with no real concept but
full of improvisation the reforms won’t be
successful.
• If the formal institutions are in harmony with
the informal institutions it is bigger chance for
success in transition.
• The role of the State is determining, but the
form and the quality of the intervention is the
key factor not the size of the State.
Thank you for your Attention!