Followers of this blog are familiar with my thoughts on ‘economic impact‘ studies. But I think I have forgotten to mention yet another way in which these studies are not only useless, but positively harmful. (This was suggested by an exchange with Ian David Moss in my previous post‘s discussion thread).
A consensus has been emerging that there has been a significant degree of overbuilding of large scale cultural facilities, where by ‘overbuilding’ we mean construction whose costs far exceed the resulting benefits. What might have contributed to this?
Here’s an ‘economic impact’ study of the expansion of the Los Angeles County Museum of Art. Here’s one for an expansion of the Corcoran, from a few years back. What do they have in common? They treat the cost of construction as a benefit, one that generates lots of ‘economic impact.’ If you treat your construction costs as a benefit, and the gains from having expanded exhibition space as a benefit as well (as it should be), then no project will possibly fail a cost-benefit test. It’s benefits all the way down, even if the gains from extra exhibition space, or seating, are very small. So why say ‘no’ to any building proposal? And the result of following this advice is exactly what we would expect.
To avoid confusing people, you might want to define your understanding of “benefit” and “economic impact.” If donors spend $300 million in a neighborhood to build a performing arts center, the neighborhood will benefit, especially if the labor and materials are purchased locally. The economic activity created by such a large project would have a significant “impact,” especially if it were in a poorer area. These benefits would incur even if the space ended up being useless. In fact, the idea fits pretty well with neoliberalism’s concepts of trickle down economics.
On the other hand, useless projects are an economic loss in the long run, especially if the evaluations consider the larger economy outside the city that built the center. Money is spent that produces no return. Without clear definitions of terms and clear perspectives on how they are framed, there are no simple absolutes. Or am I missing something?
It comes down to who is paying for the project. If the taxpayers are paying, then the construction cost should definitely not be considered a benefit because those taxpayer dollars would and should have been spent on something more directly beneficial to the community. But if rich donnars are paying, then it can be viewed as a transfer of wealth from some very rich private individuals to a project that will create some jobs for the local community.
Not very sophisticated thinking here. First, any public investment in building anything (a fire house, etc.) will generate a certain amount of economic energy. And a fire house, for example, will increase the government’s ability to fight fires in the area. I remember the new Lincoln Center in New York. It was not only in a poor neighborhood but a dangerous one (the gang fights and killing in “West Side Story,” anyone?) Nobody thought to leave the complex in those first years. It is different now.
The new and way-over-budget concert complex at the Philharmonie de Paris, for example, has transformed the Porte de Patin area economically. From a poor area, it is adding restaurants, etc. for the downtown crowds and property values in the area are jumping. And the community outreach programs have daily music programs for the local kids. Now some would object to slum kids later going to the Conservatory (which is also in the same complex) just as they would the new suburban audiences the Philharmonie attracts (they sometimes applaud between movements!) but I rather like the idea of governments looking to expand art appreciation. With a new fire station, you get faster response times. With a culture complex, you might discover a new Toscanini or Michelangelo.
‘Economic Impact’ is misleading only if we take it to mean ‘unique economic impact not created by any other sector’s equivalent-sized activity.’ Which is a mildly incomprehensible mouthful to most who are not policy junkies. So I have taken to saying that the arts do have an economic impact, but that it is not a unique one. To say that it has no impact is to tell policymakers and the voters who put them in power not to fund the arts. I’ve never yet met a policy maker or a city planner who wanted to subsidize art just to be nice.
So we need to always be clear about what we think, internally, is the most accurate and important thing to measure about the work that we do, but what we say to policymakers and the public might have to be tailored for the moment and the audience.
This seems true in education as well — when we can show drops in truancy and increased SAT scores or graduation rates, we get more arts in schools. We don’t get more arts in schools by saying, “arts are great and you should do more of them.”
That’s my concern with this entirely scientifically solid debunkery of instrumental benefits.