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Abstract

The net effect of states providing large grants for water development is cheap water for some uses. The resulting low cost of water promotes and inefficient water-using policy rather than an efficient water-conserving policy. An alternative is for states to require project benefits to equal project costs and to limit grant size to identified public and secondary benefits. In this case project beneficiaries would pay for all project costs less identified public and secondary benefits, encouraging more efficient use of existing water supplies.

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