Water resources development -- An analysis of economic justification practices of the Corps of Engineers

"Presented herein is a brief analysis of the economic justification practices of the Corps of Engineers as commonly implemented in proposals concerning water resources projects. Where applicable, recommended methods are compared to similar methods advocated for, and accepted by, private engineering firms in similar situations.The major problem exists in the lack of a profit motive in programs undertaken with the use of public funds. However, a profit can be said to have been realized in public works programs if the total benefits of the programs to all the people exceed the costs of these programs and, further, if the most efficient use possible is made of the funds employed.The significant differences between public and private policies, as noted herein, lie in the use of price projections, the use of a contingency reserve and recommended interest rates. Problems unique to public works are navigational subsidies and the determination of benefits derived from recreational facilities.Further obstacles to true efficiency in the expenditure of public funds are believed to exist in the lack of use of a prospective rate-of-return basis in making a decision between justified projects, in the need for continued progress in standardization of methods and principles and in the magnitude of the viewpoint from which improvement proposals should be approached. It is believed that the greatest obstacle to true efficiency lies in the influence of political expediency upon engineering economics"--Introduction, page 2.