The Economics of Uniqueness

The World Bank recently published a book called “The Economics of Uniqueness: Investing in Historic City Cores and Cultural Assets for Sustainable Development.” which is an intriguing title given our work at the Global Heritage Fund, since it pretty much defines a key feature of our mission:  saving heritage sites and making them work economically for local communities in developing countries.


Pingyao, a city core we have been working in since 2008

The report includes contributions by Christian Ost, an acknowledged leader in the economics of historic cities, and the award-winning Donovan Rypkema, both members of our Senior Advisory Board.  More than simply touting the various types of economic benefit brought to communities by heritage conservation (jobs, land value, tourism, etc.) the report actually focus on the strategy and process of heritage conservation.  This is key.  At Global Heritage Fund we talk about our Preservation by Design® methodology combining scientific conservation, planning, partnerships and community development.  You can only sustain a heritage resource if the community is involved in, and benefits from, its conservation.  That way you have a multigenerational conservation strategy.


On the trail to Ciudad Perdida

The World Bank report takes a similar tack: instead of simply enumerating economic benefits, it outlines the process of engaging community in conservation.  It talks about stakeholders; about balancing regulation and incentives; about balancing conservation and “an acceptable degree of change;” about ensuring a dialogue between the public and private sectors.  It is in short, a solid 21st century approach to our field.



Indeed, the report acknowledges that the economic arguments are well understood at this point: “the economic justification for public sector investment is well established” while recognizing that all projects need an element of private sector investment as well.  This is key, because the old model of public sector conservation has been somewhat obsolete since, well, since I began working in this field 30 years ago.  The byword then, in the Reagan Era, was “public-private partnerships,” and indeed the entire World Bank document is essentially addressed to public and private stakeholders in heritage.

ImageMesilla, New Mexico

The report points out the fact that the economics of heritage is a relatively new field, having separated itself from the “Use and Non-Use Value” concepts of conservation economics in the 1990s, promulgated the concept of “cultural capital” and eventually settling on the hedonic valuation method.  This is exciting to me, because it incorporates the urban economics I studied and practiced in my last incarnation with the tourism economics that has been a mainstay of GHF’s archaeological projects.  In effect, the report captures both the economics of a heritage city like Pingyao and the community- and labor-intensive economics of heritage tourism.  The latter is important because our economic understanding of tourism has evolved very significantly since the 1980s when I was first involved in this. 


Indiana Dunes town


David Throsby’s chapter deals with the concept of cultural capital and cultural assets within the context of sustainability, which again cuts to the core of the GHF mission:  if you save or restore a site without community investment and benefit, your efforts will not last a generation:  if you save it with community input and gain, it will last longer.  It will be more sustainable.  Moreover, as Throsby notes, cultural heritage, like endangered species, is irreplaceable: you cannot make new heritage sites.  They are a limited resource.


not authentic ones anyway

Actually, Throsby does consider that new heritage CAN be made, although like wine or scotch, only time tells whether it will contain the cultural value we associate with currently recognized heritage. In the United States our preservation battles today are often over 1960s High Modernism, where some debate still takes place over its value. Throsby goes on to enumerate the cultural values inherent in heritage which are non-economic:
Aesthetic Value
Symbolic Value
Spiritual Value
Social Value
Historic Value
Authenticity Value
Scientific Value

This list is broader than the Alois Riegl list many of us grew up with, but it does track with many landmarks ordinances, and in terms of our work at GHF, it relates well to both our archaeological (Scientific Value) and architectural (Aesthetic and Symbolic Value) projects, not to mention those spiritual and social glues that make communities cohere. Throsby then links the two and proposes a future valuation technique analagous to health economics that would begin to more mathematically monetize cultural values. We sort of “get it” when we read about cities people choose to live and invest in due to “quality of life” issues.
X drum tower nightS
like good dumplings
Throsby also deals with the carrot-and-stick of heritage policy. This is something we discuss a lot at the National Trust for Historic Preservation: trying to go beyond The Ones Who Say No. You need elements of both regulation and incentives to succeed in saving heritage and making it function profitably. Much of this is a catalyst effect, but Throsby backed up the contention with a host of statistics and results from a variety of cities, notably in Eastern Europe (Skopje and Vilnius). If the public-private partnership is the vehicle for heritage conservation, then regulation-and-incentive policies are the fuel for its economic engine. The field is still young, as the actual economic impacts have yet to be fully or even adequately measured. For one in the business as long as I, it is at least gratifying to see that economics is now at the heart of our field, rather than tangential to it.



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