This chapter focuses on government support for the arts. We outline the economic theory of arts support and describe the external or collective benefits arising from the arts. We also describe the arts from the perspective of merit goods. Particularly, we explain whether public subsidies may make art and culture more accessible to the poor. Finally, we survey how units of government around the world support the arts through the theoretical lens developed in this chapter.

Richard A. Musgrave (1910-2007) is the architect of modern public finance. Born and educated in Germany, Musgrave was a widely read scholar who fought attempts to narrow the scope and methods of economics. He had always been critical of what we now call welfarism, and more generally of strict methodological individualism. This chapter reviews the history of Musgrave’s connection with the idea of community. Musgrave’s limited opening – often implicit – for the idea of community provides a basis for an alternative conception of welfare. He realised the importance of a social or communal frame late in his life and left cursory remarks. Musgrave never fully articulated a coherent vision of what the idea of community belonging might entail for a democratic theory of the government’s budget. Yet, securing an ontological status for societies or communities allowed him to theorise a larger scope for public interventions than other economic models of the state. It provided a new meaning to his concept of merit wants. Reframing merit wants as ‘community wants’ is explained by the revival of moral and political philosophy in the 1970s and revisiting older German theories.