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The Impact of the National Endowment for the Arts in the United States: Institutional and Sectoral Effects on Private Funding

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  • Francesca Borgonovi
  • Michael O'Hare

Abstract

This paper examines the impact of the National Endowment for the Arts on private donations to the arts. The aim of the analysis is to assess whether public funding generates a crowding effect on private giving. We distinguish between institutional and sectoral crowding phenomena and discuss their possible implications.We used both a qualitative approach and an econometric model to estimate the effect of NEA introduction and appropriations on donations. Our results suggest that at the institutional level NEA grants do not generally induce donations to recipients while at the sectoral level appropriations and private giving are independent. The introduction of the agency appears to have caused a decrease in donations. Copyright Kluwer Academic Publishers 2004

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  • Francesca Borgonovi & Michael O'Hare, 2004. "The Impact of the National Endowment for the Arts in the United States: Institutional and Sectoral Effects on Private Funding," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 28(1), pages 21-36, February.
    • Handle: RePEc:kap:jculte:v:28:y:2004:i:1:p:21-36
    DOI: 10.1023/B:JCEC.0000009823.76834.64
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    References listed on IDEAS

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    1. Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
    2. Clotfelter, Charles T., 1985. "Federal Tax Policy and Charitable Giving," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226110486, September.
    3. Khanna, Jyoti & Posnett, John & Sandler, Todd, 1995. "Charity donations in the UK: New evidence based on panel data," Journal of Public Economics, Elsevier, vol. 56(2), pages 257-272, February.
    4. Kathleen M. Day & Rose Anne Devlin, 1996. "Volunteerism and Crowding Out: Canadian Econometric Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 37-53, February.
    5. Charles T. Clotfelter, 1985. "Federal Tax Policy and Charitable Giving," NBER Books, National Bureau of Economic Research, Inc, number clot85-1.
    6. Lawrence B. Lindsey & Richard Steinberg, 1990. "Joint Crowdout: An Empirical Study of the Impact of Federal Grants on State Government Expenditures and Charitable Donations," NBER Working Papers 3226, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Amir Borges Ferreira Neto, 2018. "Charity and public libraries: Does government funding crowd out donations?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(4), pages 525-542, November.
    2. Juan José Price Elton, 2016. "Racionalidad económica de la política cultural," Estudios Públicos, Centro de Estudios Públicos, vol. 0(144), pages 165-197.
    3. Sarah J. Skinner & Robert B. Ekelund, Jr. & John D. Jackson, 2009. "Art Museum Attendance, Public Funding, and the Business Cycle," American Journal of Economics and Sociology, Wiley Blackwell, vol. 68(2), pages 491-516, April.
    4. Bertacchini, Enrico & Dalle Nogare, Chiara, 2014. "Public provision vs. outsourcing of cultural services: Evidence from Italian cities," European Journal of Political Economy, Elsevier, vol. 35(C), pages 168-182.
    5. R. Andrew Luccasen & M. Kathleen Thomas, 2020. "Voluntary taxation and the arts," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(4), pages 589-604, December.
    6. Douglas Noonan, 2007. "Fiscal pressures, institutional context, and constituents: a dynamic model of states’ arts agency appropriations," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(4), pages 293-310, December.
    7. Michael O’Hare, 2008. "Arts policy research for the next 25 years: a trajectory after Patrons Despite Themselves," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 32(4), pages 281-291, December.
    8. Jane K. Dokko, 2008. "Does the NEA crowd out private charitable contributions to the arts?," Finance and Economics Discussion Series 2008-10, Board of Governors of the Federal Reserve System (U.S.).

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