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catholic, protestant, social-democratic, libertarian, or evangelical pillars. The UK limits the entry of
commercial broadcasters and forbids the BBC from advertising. In return for monopolistic advertising
profits Channel 4 and ITV face extensive programming requirements.
6. The arms’ length principle: institutions matter
Europe has three basic systems of allocating supply volume subsidies. The French and Italian systems are
top-down and state-driven, so bureaucrats and politicians have a say in who gets subsidy. There are many
disadvantages. It is not a very transparent system, there is lot of scope for lobbying and friends' politics,
prestige projects stand a better chance, and state arts has many unpleasant connotations. At the other end
there is the British system. The Secretary of State allocates a budget to the Arts Council and asks it to
take responsibility for allocating it to the applicants for cultural subsidy. The UK Arts Council effectively
operates an independent Art Fund out of reach of democratic checks and balances. It is then hard for the
British government to set priorities and formulate criteria for allocating subsidies. The British system has
clear advantages. There is less room for political lobbying and rent seeking and no danger of the state
trying to impose its taste on the cultural sector. A disadvantage is that the government has little room for
influencing the direction of cultural policy.
An intermediate system relies on an independent Arts Council, which gives experts' advice on
artistic merit and on how budgets should be allocated. The main difference is that the Arts Council gives
advice to the government, but it is the Minister of Culture and not the Arts Council that takes the final
responsibility for the allocation of cultural subsidies. This is the case in, for example, the Netherlands.
The government operates at arms' length and does not judge the artistic quality of different cultural
activities and organisations, but relies on experts' advice of the Arts Council. There may be political and
managerial reasons for deviating from the advice of the Arts Council. The government attempts to set the
rules of the game including criteria and priorities for applicants for cultural subsidies and the Arts
Council well in advance. This means that the government announces in a White Paper the framework
(priorities, criteria and budgets) which the Arts Council needs to adopt. The main advantage of such a
system is that the government can shape cultural policy without meddling in artistic judgements about
individual cultural activities and organisations. However, in a system characterised by ministerial
responsibility, there is maximum scope for political lobbying and rent seeking. Winners get on with
making theatre, opera, dance or whatever, while losers find plenty of opportunity to make their case in
the media. This is further reinforced by parliamentarians who want to distinguish themselves by
associating themselves with the arts. The result is that it is easier to lobby for extra budget for the arts
than for the sciences where the research councils allocate the subsidies and there is no ministerial
responsibility. Delegation of cultural tasks to an Arts Fund or the Arts Council is known as the arms’