Wikipedia says cost-benefit analysis dates back to 1848. How would a government in earlier times (say imperial Rome or China for specificity) have determined whether a project was worth the expense?

by envatted_love

The 1848 date comes from here:

The concept of CBA dates back to an 1848 article by Jules Dupuit and was formalized in subsequent works by Alfred Marshall.

I'm also assuming they didn't use NPV...

Zeerover-

There were a myriad of ways to determine whether a project was worth the expense, and it's fair to assume that rudimentary CBA was performed prior to Dupuit. In it's most basic form it's a simple calculation of expected income (or value) divided by outlay (or cost) in financial terms. Other reasons were often of political nature, which - while they are hard to quantify - would still give a clear sense of it being worthwhile or not. Building a temple improves relations with x, and that improved relation has y value for the builder, and it gave prestige and garnered adulation of z value. One often overlooked part is that by keeping their subjects occupied a ruler would reduce the risk of discontent and rebellion. This of course has a high value.

A famous example is Vespasian's decision to build the Colosseum. The preceding emperor (Nero) had been widely unpopular with the citizens of Rome. After the burning of Rome in 64 AD, Nero had claimed large portions in the center of the city on the slopes of the Palatine Hill for a opulent palace and gardens (technically a Villa, but the whole complex encompassed an area of 2.5 km² or 1 mi²) called Domus Aurea, topped off with a colossal statue of Nero, some 30-35 meters tall. Vespasian decided to raze the palace, and build a magnificent amphitheater in place of it's central lake - the colossal statue of Nero was later moved beside it, and over time the Flavian Amphitheatre became known as the Colosseum. Admissions were free to the Colosseum, and it focused on spectacular gladiator fights - the populace were content, and Flavian dynasty had forever distanced themselves from Nero - all of incalculable value.

For further reading, the texts which I've based my answer on:

The Colosseum: Emblem of Rome By Keith Hopkins

Roth, Leland M. (1993). Understanding Architecture: Its Elements, History and Meaning (First ed.). Boulder, CO: Westview Press. ISBN 0-06-430158-3.

Claridge, Amanda (1998). Rome: An Oxford Archaeological Guide (First ed.). Oxford, UK: Oxford University Press, 1998. ISBN 0-19-288003-9.

Edit: clarity, grammar and typos

cavetroglodyt

A related question maybe deserving of its own post, but I'll piggyback anyway:

How were large projects funded in antiquity? If the city of Athens (or the Roman Empire) decided to build a temple (or an arena), would this have been entirely funded by taxes, some sort of public-private partnership or donations? How would they have dealt with cost overruns?