Cognitive Dissonance , Efficient and Inefficient Rent Seeking and The Public Aid to Movies

The following section discusses the relation between cognitive dissonanceand rent seeking with particular reference to the dichotomy between inefficientversus efficient rent seeking, for the private supply of (quasi) publicmerit goods. Section 3 analyzes the European Union principles relatingto the cultural exception as applied to the movie industry and the declineof the Italian movie industry under the competition of the new media ofmass cultureThis section also analyzes the state aid to the movies in Italy by the Fundfor the Performing Arts (FUS) from 1985 to 2010, showing its failures bothfrom the point of view of the European objectives of protecting culturalidentity by the diffusion of Italian movies and from that of promotingwithin the public culturally qualified movies.The fourth section considers two other sources of public aid experiencedin Italy, in the same period, more oriented to the market: tax credits andregional and local aid for the production of movies valorizing Italy’s culturaland environmental values and local ways of life.Product placement is also analyzed here to show that the adoptionof this new non- conventional source of finance may substantiallysustain the supply of cultural goods by market means. Furthermore,the adoption of this techniques could significantly improve these localpolicies of ‘cine- tourism’, reducing the occurrence of wasteful rentseeking.Conclusions on what the case examined may tell us about inefficient andefficient rent seeking and market policies to sustain the supply of culturalgoods follow in the last section.