The Impact Of Public Funding On Cultural Urban Revitalization
Authors: Colonna Carl M. 
Published: February 2016

<p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">The intent of this study is not to defend a preconceived notion that either the market or the public sector is more defensible, but to inform the reader of the public support of the arts.<span style="mso-spacerun: yes;">&nbsp; </span>The issue at hand, is whether or not public support of art activities can generate economic development and revenue in an urban regional economy.<span style="mso-spacerun: yes;">&nbsp; </span>The scope of this paper will concentrate on the performing and visual artists.</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">Before proceeding into the investigative background, it is important to establish a protocol statement as to <strong style="mso-bidi-font-weight: normal;">&ldquo;What Art Is.&rdquo;</strong><span style="mso-spacerun: yes;">&nbsp; </span>In western societies, it has been argued that the core of art includes literature, the media, performing and visual art.<span style="mso-spacerun: yes;">&nbsp; </span>The fundamental difference in the performing artist and the visual artist is that the former is rewarded with abundance, where the latter by scarcity.<span style="mso-spacerun: yes;">&nbsp; </span>There are several reasons why art would be supported.<span style="mso-spacerun: yes;">&nbsp; </span>They are as follows:<span style="mso-spacerun: yes;">&nbsp; </span>First, art is not necessarily a daily part of our conscious lives.<span style="mso-spacerun: yes;">&nbsp; </span>However, large amounts of primary satisfaction received from art can lead to abstractions and ideas that are distributed and used in all parts of the economy.<span style="mso-spacerun: yes;">&nbsp; </span>For example, the influence color tones may have on a particular advertising campaign of a particular product line.<span style="mso-spacerun: yes;">&nbsp; </span>Second, art is basic to all human endeavors, collectively and individually.<span style="mso-spacerun: yes;">&nbsp; </span>It is a link with the past, present and future.<span style="mso-spacerun: yes;">&nbsp; </span>Art thus acts as education does&mdash;to influence, move, stimulate, and sustain us.<span style="mso-spacerun: yes;">&nbsp; </span>Third, if in fact art plays such an important part of our cultural heritage, we do not want our society to experience a deficit in art supply.<span style="mso-spacerun: yes;">&nbsp; </span>Baumol and Bowen, in <span style="text-decoration: underline;">Performing Arts: The Economics Dilemma</span>, make the argument that the labor intensity of the performing arts and its production cannot maintain the proper tempo with the continuous increase in technology in an industrial economy.<span style="mso-spacerun: yes;">&nbsp; </span>Thus the performing arts face the stoic reality that operating costs will continue to be above earned revenue.<span style="mso-spacerun: yes;">&nbsp; </span>They maintain that investments in performing arts tend to be labor intensive, therefore having the effect of widening the gap between earned revenue and operating costs.</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;">&nbsp;</p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">Barton Weisbrod, of the University of Illinois, claims that economics of the arts yield an &ldquo;option value.&rdquo;<span style="mso-spacerun: yes;">&nbsp; </span>He defines &ldquo;option value&rdquo; as the value assigned to an option to consume, which we may not plan to consume in the near future.<span style="mso-spacerun: yes;">&nbsp; </span>This creates a scenario that art works and products would have value to a person who may not personally participate.<span style="mso-spacerun: yes;">&nbsp; </span>The myopia nature of the market mechanism may very well fail to allocate and distribute works, which would share these characteristics.&nbsp; </span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;">&nbsp;</p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">Cultural capital, like real capital, is a stock variable and is subject to depletion.<span style="mso-spacerun: yes;">&nbsp; </span>Art is a part of cultural capital, but must be preserved and replenished.<span style="mso-spacerun: yes;">&nbsp; </span>Art as cultural capital can and does stimulate cultural tourism.<span style="mso-spacerun: yes;">&nbsp; </span>Thus, cultural capital can and should be used as a possible generator of economic activity.&nbsp; </span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;">&nbsp;</p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">A Heuristic database will be established showing the impact of cultural capital on the growth of art activities, jobs, spending and tourism in urban areas.<span style="mso-spacerun: yes;">&nbsp; </span>It is particularly interesting to note that cultural activities may flourish in urban areas while the urban area itself may not flourish economically. </span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">D</span></span><span style="font-size: x-small;"><span style="font-family: Times New Roman;">emand and supply economies such as those generated by cultural capital can generate economic development through broadening the economic base of an urban area.<span style="mso-spacerun: yes;">&nbsp; </span>A recent study showed the impact of forty-five art organizations in Washington, D.C.<span style="mso-spacerun: yes;">&nbsp; </span>These organizations accounted for $619 million dollars or for every one dollar invested, the art community returned an estimated five dollars and ninety cents into the economy.<span style="mso-spacerun: yes;">&nbsp; </span>Thus the art community, and support for it, act as an incubator of broad-based demand and supply economies. </span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt; mso-pagination: none;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">P</span></span><span style="font-size: x-small;"><span style="font-family: Times New Roman;">ublic support of cultural capital may very well be providing funds for high participation rates in art endeavors, as well as seed monies for low participation rates of art endeavors.<span style="mso-spacerun: yes;">&nbsp; </span>The dilemma for the funding of cultural capital in the arts industry is that there has been a significant cut at the federal, state and local levels.<span style="mso-spacerun: yes;">&nbsp; </span>This has forced the arts industry to face the need for expanding viewership and private funding.<span style="mso-spacerun: yes;">&nbsp; </span>It can be argued that the lure of a clean, productive and community enhancing industry, such as the arts industry, would certainly be aggressively sought by any urban economics development agency.</span></span></p>