Economist 5/9/16

  1. For more than a decade Copenhagen Consensus, a think-tank has assessed the global costs and benefits of different development schemes. Now it has commissioned studies, mostly by academics at BRAC, a local charity, into 70-odd activities in Bangladesh.Most of the interventions score between one and 20, meaning that a dollar spent on them will yield $1-20 of economic, social and environmental benefits. A stiffer, better-enforced tobacco tax would supposedly repay at a ratio of eight to one, for example, whereas expanding village courts would yield 18 to one.The winner, yielding a fantastic $663 in benefits for every $1 spent, is digital procurement. Bangladesh’s government requires most would-be suppliers to submit bids in person. That is a costly nuisance for them; it also encourages corruptionWeighing the costs and benefits of diverse projects is astute, and not only for poor countries like Bangladesh or Haiti.Cost-benefit analysis is common in the West, although it is often applied to just one project—a high-speed railway, say—rather than a menu of options.
  2. In recent years China has become a world beater on several fronts. It is now a leading economy, does the most trade in luxury goods and is the biggest e-commerce market. China also supplies the largest number of (and total spending by) outbound tourists.Now, according to data from the Global Business Travel Association (GBTA) China has overtaken the United States to become the world’s largest business-travel market, though just about. The GBTA estimates that spending on business travel in China amounted to $291.2 billion last year compared with $290.2 billion in America. However, the Chinese market is set to grow by 10.1% and 9.8% in 2016 and 2017.The GBTA estimates that 95% of Chinese business travel is domestic, tapping into a groundswell of consumption in China’s smaller cities in the interior and supported by a host of infrastructure projects.
  3. AS THE dust settles on Sadiq Khan’s victory in London’s mayoral election, attentions are turning to Zac Goldsmith’s campaign and his aggressive focus on his rival’s past encounters with Muslim hardliners.The themes on which Mr Goldsmith so contentiously challenged Mr Khan are hardly irrelevant. In the past year Islamist terror attacks have hit the two European capitals closest to London.And it is true that Mr Khan has links to certain reactionary Muslims, some of whom have expressed extremist views. His new role gives him influence over London’s schools, the front-line of the government’s anti-radicalisation “Prevent” strategy.First, Mr Goldsmith played up ambiguities as to what, precisely, his rival had done wrong. When pushed, he insisted that he was not trying to portray Britain’s most prominent Muslim politician as an extremist. Yet his campaign seemed to imply as much.
  4. Second, the Goldsmith campaign failed to pin down what this had to do with Mr Khan’s suitability to be mayor. The claims it raised publicly (and the more lurid ones it quietly briefed to journalists) fall into three categories. Some had to do with his background as a civil liberties lawyer; like his links to Suliman Gani, a radical imam, his “association” with whom included angry clashes over gay marriage and Mr Khan’s involvement in a bid to boot Mr Gani out of his mosque.Third, Mr Goldsmith gave such observations an undue prominence in his campaign, especially towards the end. London house-prices are on track to hit £1m by 2030 and are wrecking the capital’s social mix. On this, the Tory candidate had nothing substantive to say.
  5. The era of digital downloads in any case proved short: in 2015, for the first time, more money was spent on paid subscriptions to music-streaming services.The economics of digital music seem to favour streaming. Streaming offers a way to pick up those pennies from the pavement. By bundling thousands of songs together and offering access to them on demand, streaming services like Spotify have created an appealing product. IFPI, an international recording-industry trade group, estimates that there are now 41m fee-paying subscribers worldwide, up from 8m in 2010.Each time a user listens to a song, the artist earns a small fee: about $0.007 on average at Spotify, for instance. This income pales in comparison with the windfalls that sales of physical albums used to generate.As streaming grows, artists are pursuing several broad strategies to boost what they earn. Most rely on cross-selling: streaming helps build demand for live performances.The most marketable artists increasingly follow a third strategy, of deeper involvement with streaming services themselves. Tidal was set up by musicians, including Beyoncé and her husband Jay-Z.Popular acts are also learning to play online music outlets off against each other by auctioning off the exclusive right to stream or sell their music, a practice called “windowing”.Other artists focus on boosting album sales. Some, like Adele, eschew streaming, relying instead on older fans who are still happy to buy CDs.
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