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The Transition of the State’s Role in Cultural Financing caused by the Financial Crisis

The Transition of the State’s Role in Cultural Financing caused by the Financial Crisis. UNE E CC 2011 Antwerpen , Belgium Presenter: Tóth , Ákos PhD Kecskemét College , Hungary. The Motivation of the Research.

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The Transition of the State’s Role in Cultural Financing caused by the Financial Crisis

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  1. 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

  2. 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.

  3. 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?

  4. 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.

  5. 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.

  6. 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.

  7. 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)

  8. 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).

  9. 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)

  10. 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 internationaldevelopment funding will be protected.

  11. 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.

  12. 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.

  13. Thank you for your Attention!

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