The political economy of cultural spending: evidence from Italian cities

We investigate the relationship between Italian municipalities' spending on culture in the 1990s and 2000s and a number of political variables—such as a left/right dummy, an election-year dummy and a term-limit indicator—controlling, among other things, for economic and socio-demographic characteristics of the population, the level of human capital and instruction, proxies of social capital, the extent of private financing of cultural provisions and touristic and artistic relevance. We use a panel-data regression analysis and find that, indeed, some determinants of public expenditures on culture are political. In particular, we identify an electoral cycle in which the incumbent spends less on culture in an election year. This result is robust for variations in the empirical model accounting for both the persistence and spatial interdependence of cultural expenditures by municipalities.