200 MULTIPLE PURPOSE RIVER DEVELOPMENT 



taking the development of streams by co-operative arrangements; it 

 may not be present in all such relatively small river systems. 



In this chapter, we identify one relatively small stream to analyze 

 an approach to problems that arise in such circumstances. We 

 first detail the background material pertinent to development of 

 Willamette River Basin sites and assess the implication of alterna- 

 tive approaches to efficient development. In this case, we conclude 

 that the differences in efficiency between alternative approaches to 

 development are likely to be small; we, therefore, select the distribu- 

 tion of costs and gains as the major problem for analysis in con- 

 nection with co-operative arrangements of this type. We then 

 analyze the difference in accounting costs ^ occasioned by different 

 methods of developing a hypothetical site, before analyzing the 

 differences in the distribution of those costs that correspond to the 

 various approaches that have been suggested. 



The object of all this is to provide better understanding of the 

 income redistributive consequences of public policies. To complete 

 the picture, it is necessary to consider gains as well as costs. Chapter 

 VIII analyzes, to the extent possible, the differences in the distribu- 

 tion of gains associated with different approaches to development 

 in similar cases. 



The significance of these two companion chapters is this: 

 although we have concentrated on questions of economic efficiency, 

 we cannot ignore the redistributive consequences and the issues 

 which these raise in terms of equity. Ideally, analyses such as those 

 which follow should have been undertaken along with our efficiency 

 analysis to provide the significant information relevant to a policy 

 decision in each case. Since our main purpose has been to illustrate 

 efficiency relationships and clarify issues, rather than to exhaust 

 the possibilities for fruitful analysis for each case study, we have 

 reserved the analysis of income redistribution for treatment in 

 connection only with the present case. 



The Willamette River System and Proposals for Development 



The Willamette River drains an area of 11,200 square miles, 

 approximately the size of the Coosa River's drainage area. This 



'The term "accounting" cost is used to distinguish the costs appearing in the 

 financial accounts of the enterprise unit from tlic "opportunity" or "social" 

 costs used where wc are concerned with economic efTiciency. 



