Abstract

COST allocation in the sense of apportioning joint costs of multiplepurpose projects to individual products (purposes) has been of considerable significance for western water policies in the past.1 It will be of even greater significance in the future: an increasing proportion of water resources development is taking place in the of large, public, multiple-purpose projects. There has been an intimate connection between cost allocation and several basic and vital policy issues. These issues will be called here feasibility, repayment, rate making, yardstick, and form of contract. It appears fitting that the spotlight of economic analysis be thrown on these issues. Focusing on the connection between these issues and cost allocation entails some unavoidable sacrifices. These should be made clear at the

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