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Purpose – The purpose of this research is to explore the economic and social arguments used in support of government assistance for cultural well‐being, and the accounting measures used to capture cultural well‐being at a regional level in New Zealand. Design/methodology/approach – Accounting information reported in city council annual reports is used to examine expenditure on cultural well‐being. The research investigates possible relationships between regional economic growth and regional expenditure on arts, culture and heritage. It also investigates justifications for expenditure on activities classified under the category of arts, culture and heritage in the annual reports produced by New Zealand city councils. Findings – In most regions, funding for cultural activities has increased over the past ten years. The findings of this research indicate there is no significant relationship between funding on cultural activities and regional economic growth. Instead, the research highlights the emphasis placed on social benefit arising from funding cultural activities. Research limitations/implications – The research is limited by access to comparable data. Accordingly, not all New Zealand regions are included in the analysis, resulting in a small number of observations. Moreover, robust city‐based measures of economic growth are unavailable, resulting in the use of labour force participation as a proxy for economic growth, together with the elimination of some regions in part of the analysis. Originality/value – Extant literature indicates that government expenditure on artistic and cultural activities is undertaken for reasons that include: possible economic benefit or generation of externalities, mitigation of market failure, educational purposes or improved national identity. In New Zealand, the “merit good” argument prevails with the objective of spending on artistic and cultural activity by local government expected to generate social rather than economic benefit.
Pacific Accounting Review – Emerald Publishing
Published: Sep 7, 2012
Keywords: Cultural expenditure; Local government; Accounting; New Zealand
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