42 MULTIPLE PURPOSE RIVER DEVELOPMENT 



specifying efficiency criteria. Before examining the comparative 

 efficiency of alternatives in actual cases in the water field, account 

 must be taken of some of these weaknesses in our first approxima- 

 tion of the efficiency conditions. 



UNSTATED ASSUMPTIONS OF THE MODEL 



Although we made explicit some of the assumptions of the com- 

 petitive model, we purposely left some implicit, in order to describe 

 a framework of analysis without introducing complications at that 

 point. Broadly speaking, we implied that the market mechanism 

 was sufficiently comprehensive to allocate resources which would 

 satisfy the community's demand for goods and services of every 

 economic variety. Moreover, such goods and services were 

 implicitly assumed to be available only through the intermediary 

 of the market. Finally, granted the assumptions explicitly made, 

 market prices were demonstrated to reflect commodity costs accu- 

 rately and completely. And costs, in this case, were measured in 

 terms of human effort and sacrifice, as appraised by individuals on 

 their personal scale of values. 



Satisfaction of Group Wants. The competitive model does not 

 take explicit account of the fact that no markets exist to serve as 

 intermediaries for the satisfaction of some economic wants. If par- 

 ticipation in the enjoyment (consumption) of some types of goods 

 or services cannot be made contingent on the payment of a price, 

 once an investment decision for their provision had been made, 

 the conditions for a market are lacking. If the enjoyment of a 

 commodity cannot be denied any member of the community with- 

 out simultaneously denying access to all consumers in the com- 

 munity, the pricing mechanism is not adequate for allocating 

 resources to it. For no private party would undertake to provide 

 such commodities if he could not recover costs. Examples of 

 items of consumption that cannot be supplied separately to indi- 

 vidual members of the community include such services as street 

 lighting, police protection, protection for occupants of a flood 

 plain, etc., which tend to blanket individuals who are members of 

 a group or residents of a locality. Thus, there is no incentive to 

 volunteer payment for the enjoyment of such services; failure to 

 pay cannot result in restricting access to the enjoyment of the 



