Economic Theory and Local Content Quotas for Television

It's not common for those involved in the practical and creative world of film and television production to become involved in the arcane world of economic theory. Partly this is because of the dense jargon involved, and partly because the relevance is rarely apparent. Earlier this year, a remarkable document was published attacking SPADA's proposed quota model and hiding behind a torrent of econobabble designed to discount the worth of our ideas. 1 I approached that document with considerable trepidation, as one with neither formal economic training nor a fully functioning left brain. After wading my way through many pages I was appalled at the emotional and ill-informed claims disguised as economic theory. Take this as an example: However, the case [for quotas] rests on the notion that these programmes somehow contribute to local culture or national identity – the 'consumption externalities' argument above. Yet there is no inexorable link between the provision of local programming and the promotion of local culture. Nor is the financing of television programmes necessarily the best way of promoting local culture. Spending public money in other ways, such as encouraging gardening with native plants, could potentially be a better way for promoting national identity. In some despair, I spoke to several economists to try and understand whether the claims made were based on generally accepted economic theory. The good news was that economic theory needs to be considerably stretched to accommodate the complexities of broadcasting and that the theories propounded were at least highly arguable. Not that the paper accepted this or even attempted to provide a unbiased analysis. Thus came the idea to try and rebut economic theory with different economic theory. We've indulged in our own version of econobabble in this paper. Unlike Chen and Palmer's effort, we accept the idea of different arguments, acknowledge strengths and weaknesses and generally point out where economic theory can be useful and where it is simply too narrow in its approach. This paper is not always an easy read either. However policy analyst David Hay is to be congratulated for his painstaking attempts to make theory generally understandable to a layperson and for his unbiased and intelligent approach to his discipline. It's refreshing to be confronted with a warts-and-all analysis rather than a piece of agitprop designed to scare, not inform. And those of us in the television business treasure the value of impartial information. …