In 1492, Christopher Columbus sailed the ocean blue, didn’t fall off the edge of the earth and returned with enough prospects to do it again another three times. The project was funded by a combination of public and private funds. Whatever may have been its goals, there is little doubt that it earned a “commercial rate of return” for all concerned and arguably at least for Spain, a decent public return too.

But think about what might have happened here had hard-nosed economists and accountants had a go at evaluating the project’s worthiness. There was a high probability of failure with a complete loss of all funds. There was also a good chance that whatever was discovered was of little use. And then there were ‘pie in the sky’ outcomes of which it would be impossible to quantify properly. It is little wonder that the whole venture was touch and go and it took Columbus years to put it together. 500 years or so later some accountants tried to replicate the cost-benefit analysis and found it hard to do.

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