Non-conventional sources of financing movies and rent seeking: the case of Italy

In this paper we analyze the Italian experience of public financing of movies. We argue that public aid to movies as cultural products allowed by the European Union on the basis of the “cultural identity concept” while is open to much rent seeking deviates the public policy from the true cultural objectives of promoting in the public the movies or artistic and cultural quality. In the Italian experience the state aid given to the projects of the movies by an ad hoc Committee on the basis of given parameters, has damaged rather than reinforced the Italian movies production thus betraying the main (European ) justification of the rather generous aid. And the aid assigned to the movies of particular cultural value has been largely inefficient. The more recent aid by tax credit may have better economic results but is open criticism, particularly as a cultural policy. The aid by the regional and local governments to the movies produced on their territory that valorize their cultural heritage , their landscape and local traditions as touristic attractors appear to be richer of positive results also from the cultural point of view. This last type of public aid may be classified as a sort of product placement . Its efficiency might be improved if administered by adopting the techniques developed in the market as for the product placement. The general conclusion is that public aid to movies, based on the European principles of cultural identity diverts it from true cultural objectives while the same criticism does not apply to the local aid connected with the local cultural values in a competitive frame. Likely the (limited) “renaissance “ of the Italian movies may be explained also by these reorientation in the public policies .