Public choice, economics of institutions and the Italian school of public finance

A vast, multi-disciplinary, literature has investigated the reasons why, in democracies, policies may actually pursue vested narrow goals, to the benefit of restricted groups but at the expense of the community. This analysis constitutes the foundation of influential contributions in the growing field of economics of institutions. This study highlights how the concepts of narrow interest groups and ruling elites can be found in the largely forgotten strand of research conducted by leading scholars of the so-called Italian School of Public Finance (ISPF), which emerged over the end of the nineteenth century and the first half of the twentieth. The chapter also indicates how the fundamental insights on the political decision-making provided by the economics of institutions and the ISPF are able to shed a light on central problems concerning the definition and implementation of cultural policies.