Abstract

Cuts in public expenditures to meet Maastricht indicators are carried out without much criterion in Europe. Merit goods, for example, are treated like any other item in public budgets: the reason is that the budgetary process is a short term proposition and thus expenditure on cultural goods is sacrified. On cultural goods, however, two concepts of time are involved. There is the time preference of individuals (their «impatience», due also to their limited life span), which implies that it is more valuable to acquire (or use) a cultural good now than at a later date, and the value of a cultural good is equal to the stream of future utilities obtainable from it, discounted at a positive rate. The problem with this notion of time is that it is common to all types of goods, while cultural goods must be preserved as time goes by. There is, in fact, a collective notion of time. Society lasts forever and it does not evaluate the future differently from the present. Thus, for cultural goods, the social discount rate, in principle, should be zero. On balance, it can be argued that the social discount rate applicable to public cultural investment should be considerably lower than the rate applicable to agriculture, industry or commercial services, and, logically, cuts in budgets should be smaller than for other items.