Statement of the Problem 11 



Objectives of the Study 



Implicit in what we have said so far is the notion that the 

 development of multiple purpose and integrated systems is dictated 

 by efficiency considerations. In fact, this is commonly alleged and 

 we have based our description of the characteristics of river basin 

 development on this assumption. We have not demonstrated this 

 to be the case, however; nor have we, as yet, defined in any precise 

 way our understanding of what is meant by economic efficiency. 



A preliminary task, therefore, must be to define the concept 

 analytically. After this is done, we can reconsider the nature of a 

 development program in the light of a more precise understanding 

 of the concept of efficiency. We should then be able to satisfy our- 

 selves by means of analysis as to whether or not efficiency considera- 

 tions in river basin development require a different approach from 

 that generally encountered in other sectors of a free market 

 economy. If by taking this route we can come to conclusions 

 dispassionately, we may succeed in reducing the emotional content 

 of the reaction to the equity considerations posed in river basin 

 development. At least, we can make explicit what is involved by 

 way of efficiency. An unlimited range of possibilities may be open 

 if no restraints are imposed. If we value efficiency highly, however, 

 a decidedly narrower range of possible alternatives may remain. 

 We may be able to isolate the obstacles to efficient river basin 

 development and the changes in the institutional environment 

 which would open additional opportunities for efficient develop- 

 ment. Once this is done, the range of choice among alternatives of 

 equal efficiency may be widened. Our first general objective, 

 accordingly, is to spell out what we mean by efficiency, to define 

 the special problems that arise in this connection in the field of 

 river basin development, and to touch upon the conditions that 

 must be satisfied, or criteria that must be met, to ensure our 

 attaining the desired efficiency goals. 



We hope to do all this without becoming involved, at the time, 

 in equity considerations, even though we recognize that different 

 ways of doing things may well involve a different distribution of 

 the benefits and incidence of costs. After we have addressed the 

 efficiency problems, the substance of the equity issue can command 

 our explicit attention. We shall want to analyze objectively the 

 differences involved in the distribution of income, depending on 



