Cultural Economics and Cultural Policy:
How are they Interrelated?
David Throsby
Professor of Economics
Macquarie University, Sydney, Australia
Keynote address to conference Cultural Economics: from Theory to Practice, held at
Warsaw School of Social Sciences and Humanities, 29 November 2010
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Economics of art and culture: some highlights
• Early contributors: Keynes, Galbraith
• Baumol and Bowen, Performing Arts: The
Economic Dilemma, 1966
• Establishment of Journal of Cultural Economics
in 1977
• Biennial international conferences since 1979
• Expansion of fields of interest 1980s, 1990s
• Current concerns with cultural industries, cultural
policy, culture in development
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Development of cultural policy: some highlights
• UNESCO Conference, Mexico City 1967
• Country reports on cultural policy 1970s (Poland
report in 1973)
• Interest in economic impacts of art and culture
1980s
• UNESCO Conference, Stockholm 1998
• UN Cultural Diversity Convention 2005
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UNESCO Convention on the Protection and
Promotion of the Diversity of Cultural Expressions
Motivations
• cultural goods in international trade
• cultural impacts of globalisation
• culture and sustainable development
Outcomes
• focus on the developing world
• importance of cultural policy
• international relations
• protection of “vulnerable” cultural expressions
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Some important links between cultural economics and
cultural policy ― Economics can help us understand:
• where the arts and culture “fit” in the macroeconomy:
 what are cultural goods?
 what are creative industries?
• how the cultural production sector works:
 the role of cultural capital
 the role of creative labour
• how the financing of culture creates public value:
 economic value
 cultural value
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Cultural goods and services
(1) Supply-side definition
•
require creativity
• convey symbolic messages
• embody some intellectual property
(2) Demand-side definition
•
characterised by “rational addiction”– demand is cumulative
(3) Value definition
•
possess or give rise to cultural value
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The Creative Economy
• creative industries in London in 1980s
• Creative Nation, Australia, 1994
• Creative Industries Task Force, UK, 1997
• increased policy interest in Europe and elsewhere,
2000+
• Creative Economy Report, UNCTAD, 2008
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The concentric circles model of the cultural industries
Core creative arts
Literature
Music
Performing arts
Visual arts
Related industries
Advertising
Architecture
Design
Fashion
Other core cultural industries
Film
Museums, galleries, libraries
Photography
Wider cultural industries
Heritage services
Publishing and print media
Television and radio
Sound recording
Video and computer games
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Creative Cities
• cultural industries as drivers of urban and regional
growth
• the “creative class” hypothesis
• importance of cultural infrastructure
• cultural tourism
• the “Bilbao effect”
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Types of capital in economics
• physical capital: buildings, equipment, machinery
• human capital: people’s skills, talents, intellectual
ability
• natural capital: renewable and non-renewable
resources
• cultural capital: tangible and intangible cultural assets
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Stock of assets
Cultural
capital
Heritage buildings, sites
Art works and artefacts
Music and literature
Inherited traditions
Flow of services
Community participation
Consumption of the arts
Heritage tourism
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The economic role of artists
• multiple job-holding
• work-preference behaviour
• importance of artists as innovators
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Public value of
the arts and
culture
Economic value
Cultural Value
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Measurement of value:
economic value can be measured in
money terms
cultural value is multi-faceted and has
no single unit of account
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Economic value is created via:
• direct, marketable benefits of the arts and culture, e.g.
in the production and consumption of cultural goods
and services
• indirect, non-market benefits of the arts and culture,
i.e. public goods reflecting:
 existence demand
 option demand
 bequest demand
The public-good benefits are a case of market failure,
providing a prima facie case for government intervention
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Cultural value:
• aesthetic value
• spiritual value
• social value
• historical value
• symbolic value
• authenticity value
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