The Making of Cultural Policy: A European Perspective

10

Getzner (2002) econometrically analyse determinants of total public cultural spending in Austria
during 1967-1998. He finds that cultural spending, gross domestic product and the relative price indices
of gross domestic product and government spending are co-integrated. The ratio of cultural spending to
gross domestic product may vary in the short run, but rises steadily with gross domestic product. Cultural
goods seem to have income elasticities greater than one, which lends support for Wagner’s law of ‘the
growth of state activities’ as described in Peacock and Scott (2000) and Frey (2000). Public cultural
spending also rises with the price index of government spending (which is evidence for Baumol’s cost
disease). The relative importance of cultural spending thus grows over time as the national income grows.
In contrast to Schulze and Rose (1998), cultural spending in Austria thus seems relatively unaffected by
the ideology of the ruling political parties or by ‘wars of attrition’ between political parties described by
Alesina and Drazen (1991). As new comparative data becomes available, comparative econometric
studies into the determinants of cultural spending in Europe become feasible.

Table 5: Cultural subsidies per visit and box office receipts in the Netherlands

Source: van der Ploeg (1999).

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