272 MULTIPLE PURPOSE RIVER DEVELOPMENT 



the extra cost required to provide stream regulation for 

 fiscally independent parties downstream, whether public or 

 private. 



3. Where maximizing the value of a system's output requires a 

 high degree of co-ordination in reservoir operations, institu- 

 tional arrangements to permit this degree of integrated manage- 

 ment must be provided. 



4. Where nonmarketable project services are to be included in a 

 multiple purpose project consistent with efficiency goals, the 

 cost of such services must be publicly borne. 



It is not the purpose of this study to suggest whether or not 

 such changes in policy are appropriate, desirable, or practicable. 

 Such changes are matters of high policy involving conflicts of 

 interests and values. As such, in a democratic community, the ulti- 

 mate decisions ought accurately to mirror an informed public 

 opinion on these questions. We have attempted only to specify 

 the necessary conditions to be met and suggest the policy issues 

 implicit in achieving efficient multiple purpose development — 

 whether under partnership or other arrangements — to provide a 

 basis for informed opinion. 



Our investigations also illuminate some of the factors which 

 determine the relative capability of different echelons of govern- 

 ment — local, state, and federal — to achieve efficient river basin 

 development. Where large interstate river systems are involved, 

 agencies of local government, such as conservancy districts, are con- 

 fronted with problems somewhat analogous to those of a private 

 company in all respects except one. That is the fact that such 

 public entities have the powers of assessment to recover costs of 

 providing nonmarketable services. Yet the size of the efficient scale 

 of development in relation to the jurisdiction of the lower echelons 

 of government also may render difficult the execution of the most 

 efficient plan of development for a large river system. Finally, the 

 state or locality may be confronted with the same problems as a 

 private developer in achieving co-ordinated system operations. 



It is true that, where an entire river system and the benefits 

 which accrue directly from its development fall entirely within a 

 state, the state or one of its agents should be capable of developing 

 a stream for multiple purposes consistent with our efficiency objec- 

 tives, provided it has sufficient access to developmental capital. In 



