Government Failure: The Ineffectiveness of Italian State Subsidies to Film

  • Emanuele Teti
  • Alan Collins
  • John Sedgwick
Part of the Media Business and Innovation book series (MEDIA)


Public financial support to national film production is typically conditional on subjective artistic and sociocultural criteria and objectives. Yet the question remains as to whether state subsidies actually help films at the box office: did audiences get to see and appreciate films that otherwise would not have been made? While recognising the complex political and administrative context, the results of this study suggest that the public subsidy regime in Italy between 1995 and 2003 failed to assure the development of an industry as intended, since in an overwhelming number of cases the film revenues of those films supported were not sufficient to cover production costs, even when supported by a subsidy. Drawing from a variety of publically available sources, a dataset was constructed to estimate the profitability of films both supported and not supported by State aid to film in the Italian market. Our approach differs from that of others in that we measure the success of films in the market by the revenues they generate. By factoring in costs of production, a better idea of the costs to society of subsidising film production can be established.


Artistic talent Arts and cultural policy Film subsidy Government failure Italian Cinema Market failure Opportunity cost Public choice theory Resource allocation 


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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Bocconi UniversityMilanItaly
  2. 2.Portsmouth Business School, University of PortsmouthPortsmouthUK

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