Redefining Policy Effectiveness in the Digital Era: From Corporate Scaling to Inclusive Employment Growth—Evidence from China’s National Cultural Demonstration Zones

Abstract

Public cultural services are traditionally viewed as welfare provisions. However, this perspective overlooks their productive externalities as critical social infrastructure. This study treats China’s National Public Cultural Service System Demonstration Zone program as a quasi-natural experiment to examine its economic performance. The analysis utilizes panel data from 280 prefecture-level cities between 2008 and 2021 and employs a multi-period difference-in-differences model. Results show that the policy successfully increased employment in the cultural sector. This was achieved by enabling flexible labor opportunities through digital platforms and government procurement, rather than through significant growth in formal enterprises. We term this structural divergence De-organized Growth. Mechanism analysis confirms that Fiscal-Digital Synergy drives this phenomenon. Effective collaboration between government funding and digital technology activates cultural consumption on the demand side and facilitates disintermediation on the supply side. Crucially, we identify a nonlinear Digital Exclusion Trap. In this trap, fiscal support is ineffective or even counterproductive in regions falling below a critical digital infrastructure threshold. The findings suggest that the equalized provision of public culture serves as a productive input for achieving UN Sustainable Development Goal 8 regarding decent work. We advocate for a shift in governance paradigms from traditional administration to a strategic purchaser role. This role leverages digital platforms to foster a more inclusive labor market.