Soft Law, Governance and the Developmental State:

Assessing Creative Industries Strategies for Developing Countries

Terry FlewProfessor of Media and Communication, Creative Industries Faculty,

Queensland University of Technology

Presentation to the Centre for Chinese Media and Comparative Communication Research, Chinese University of Hong Kong, 12

September, 2012

A convergent media policy moment in Australia?

• Convergence Review (final report April 2012)• ALRC, Classification—Content Regulation and

Convergent Media (final report Feb. 2012)• Independent Media Inquiry (Finkelstein Review) – report

delivered Feb. 2012• National Cultural Policy (forthcoming) – review of

Australia Council released May 2012• Akin to “cultural policy moment” of early 1990s?

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Australian National Cultural Policy

• Discussion paper released in August 2011• Strategic goals

1. To ensure that what the Government supports – and how this support is provided – reflects the diversity of a 21st century Australia, and protects and supports Indigenous culture.

2. To encourage the use of emerging technologies and new ideas that support the development of new artworks and the creative industries, and that enable more people to access and participate in arts and culture.

3. To support excellence and world-class endeavour, and strengthen the role that the arts play in telling Australian stories both here and overseas.

4. To increase and strengthen the capacity of the arts to contribute to our society and economy.

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Scope of National Cultural Policy

• Core arts – “concentric circles” model• Creative industries – commercial media, broadcasting

and digital technologies• Cultural heritage – GLAM sector

Craik et. al. (2000) – domains of cultural policy– Arts and culture– Communications and media– Citizenship and identity– Urban and regional culture; cultural heritage; tourism

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The ‘Concentric Circles’ model

Tensions in Australian Cultural Policy

• Are the “core arts” at the centre of a national cultural policy?

• Should economic/industry concerns be an important part of the policy?

• Digital technologies and the participation imperative• Concerns about the Australia Council as the primary

“gatekeeper” of arts funding – separate review of Australia Council released May 2012

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The problems with “concentric circles”

• Aesthetic – circular and self-justifying arguments for the superiority of the “high arts”

• Economic – becomes a de facto defence of existing funding arrangements

• Equity – normative cultural policy typically aligns with middle-class cultural consumption

• Policy – does not deal with new arguments associated with creative industries e.g. culture as a factor in innovation; maintains institutional status quo

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From Government to Governance

• Policy a gap in creative industries theories– CI theories often tied to globalisation/cities discourses– CI practice leaned too heaviny on “nw public

management” discourses of 1990s

• Andy Pratt – need to capture both “institutions and agencies charged with governing (government) and the modes and manner of governing (governance)”

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Dimensions of Policy

• Policy: goals and norms that inform and underpin relevant legislation, and the intentions and instruments associated with shaping the structure and behaviour of actors within a bounded policy system (e.g. media policy, cultural policy);

• Regulation: operations and activities of specific agencies that have responsibility for oversight the policy instruments that have been developed to manage a policy system;

• Governance: totality of institutions and instruments that shape and organize a policy system – formal and informal, national and supranational, public and private, large-scale and smaller-scale.

• Continuum of governance strategies– Command-and-control to market instruments– ‘hard law’ to ‘soft law’– State regulation to self-regulation and quasi-regulation– Significance of behavioural factors (“nudge” theories – Sunstein and

Thaler)9

Governance and the ‘New Institutional Economics’

• “The importance of a country’s system of governance – its formal and informal institutions (the latter including its culture and unwritten values) and their interaction with the behaviour of economic and political entrepreneurs and organizations – for the country’s success in terms of its long-term economic growth, enhancement of human welfare and societal development” (Oman and Arndt, 2010: 7).

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Soft law

• Application of a diverse range of policy instruments in order to achieve policy goals is the norm, as is experimentation with institutional forms;

• Government regulation is only one element of regulation: just as power is dispersed among social institutions, the capacity to regulate exists among non-government as well as government institutions;

• Regulation is not limited to laws and rules, but also includes market-based instruments, regulation through contracts, licencing and accreditation requirements, regulation through design rules, and informational regulation including ratings and performance indicators;

• Regulation is not just restrictive or coercive, but can also be facilitating, enabling, and can act to constitute a field – it can make things happen, as well as stopping things from happening;

• Regulation can shape markets and create new markets, as well as being a controlling factor on the behaviour of participants within already existing markets.

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Creative Industries and Development

• UNCTAD, Creative Economy Reports (2008, 2010)– ‘adequately nurtured, creativity fuels culture, infuses a

human-centred development and constitutes the key ingredient for job creation, innovation and trade while contributing to social inclusion, cultural diversity and environmental sustainability’ (UNCTAD, 2010: xix).

– ‘despite the richness of their cultural diversity and the abundance of creative talent, the great majority of developing countries are not yet fully benefiting from the enormous potential of their creative economies to improve development gains’ (UNCTAD, 2008: 6).

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Creative Industries Policies and Industry Policies

• Consideration of the creative economy becomes a key element of industrial policy, whereby industrial development strategies can exploit the potential dynamism of the creative industries in generating growth in output, exports and employment. A positive outlook for industrial policy in which creativity and innovation are important drivers of growth is well suited to the contemporary economic conditions of globalization and structural change (UNCTAD, 2008: 173-174).

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UNCTAD Model of the Creative Industries

Developmental State Theory

• Lack of thinking about the state a characteristic of early development theories – Modernisation theories: state capacities taken as given– Dependency theories: client states captured by foreign

interests– Rise of East Asian economies from 1970s onwards

sharpened thinking about significance of state capacities– Limits to globalisation theories

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Typology of developing nation states (Peter Evans)

• Predatory state• Fragmented intermediate state• Developmental state

– Governments have sufficient power to guide investment and set priorities

– Leadership has a coherent developmental vision– Competent and coherent bureaucracy– State that is both embedded in civil society, yet possesses

sufficient autonomy to work beyond shrot-term sectional interests

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Paradox of creative industries in developing countries

• Private sector is clearly the most dynamic area• Large informal economies• CI performance gap relative to opportunities is

substantial• Need to the state to take the lead in “late development”

models (Gerschenkron thesis)

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The paradox of intellectual property

• IPRs generally seen to work for rich nation interests against those of the poor

• Are IP laws a condition for international investment and technology transfer?

• Sustainability of Cis in developing countries depends upon diversification of revenue base i.e. upon establishing ongoing market relations

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Conclusion

• Geographical locus of creative industries debates ahs been shifting to developing world

• Relationship between creative industries and cultural policy remains an ongoing issue

• Institutional conditions matter, particularly in developing nations

• State capacities need to be exercised in a light touch/soft law manner to “formalise” the informal creative economies

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