Chapter 31 Cultural Districts and Their Role in Developed and Developing Countries

The aim of this chapter is to analyze the economic properties and the institutions governing the start-up and evolution of cultural districts. Cultural districts are a good example of economic development based on localized firms and local culture. The first part of the chapter (Sections 1–2) reviews the relationships between culture, viewed as an idiosyncratic good, and the Marshallian theory of industrial districts. Sections 3 and 4 of the paper present a discussion of two models of cultural districts: the industrial cultural district (mainly based on positive externalities, localized culture, and traditions in “arts and crafts”), and the institutional cultural district (mainly based on property rights assignment and symbolic values). Policy issues are analyzed in Section 5, with particular reference to the applicability of the two models of cultural districts in developed and developing countries.