Strings Attached to Arts Funding: Panel Assessments of Theater Organizations through the Lens of Agency Theory

Abstract

Agency Theory deliberates the relationship between principals and agents, and the agency problems that originate in information asymmetries and goal conflicts. Through the lens of Agency Theory, with mixed methods, I investigate the decisions about funding of theatre organizations by governments, based on assessments by third parties. In two settings “artistic quality” is the major determinant of public support, to the detriment of criteria as participation, social objectives, efficiency and entrepreneurship. I argue that, next to previously recognized principal-agent relationships between governments and theatres, and governments and panels, a third relationship is very influential: between an arts field and panels.