_3_ impeded **the** process ol' negotiation and exchange lhat could lead to a socially optimal allocation. ('onsequently, conflicts over the dcvclopmnent and allocation of water persist.

The dominant tuse conflicts oveI river basin resource allocation are ror water quantity and water quality in space and time. Uses may be classified as either consumptive or nonconsumptive. Consumptive usc is defined .o be thc amouni of water withdrawn from the system in such a way that it is no longer available for other uses. In this respect, river basin water has common pool characteristics in that one use precludcs other uses. Examples are agricultural irrigation and urban water use. Consumptive uses may compete by sector (e.g. municipal, agricultural, and industfiaVcommercial), within sectors (allocation to one farm versus another farm), or regionally (upstream regions versus downstream regions). Nonconsumptive uses do not result in a significant reduction in net stream flow, and depending on the type, may allow for multiple nonconflicting uses at the same time and location. Examnples of nonconflicting nonconsumptive uses include reservoir storage, fish habitat, passive recreation (e.g. sightseeing, swimming). More problematic situations occur when nonconsumptive uses interfere with or lower the value of water precluding or impairing its use by others. For example, nonconsumptive uses such as leaching salts from agricultural fields, diverting river water to cool power plants, and using the river to dispose of partially treated or untreated waste, degrades water quality at the expense of other uses. Although the upstream users may be best suited to improve the quality of downstream water by altering water use practices, often the upstream user has no means of capturing the benefits or even of recouping the costs, thereby having no incentive to reduce pollution loads. Consequently the externalities persist. Nonconsumptive uses of water also conflict in time. For example, residential users may prefer that a quantity of water be stored for future use, environmentalists may prefer that water be released to support the fish habitat, and the industrial sector may prefer a release for electricity generation. For each user, although the water extracted and its quality remains the same, one use at a particular time precludes another use.

Because the use and the value of river basin resources depend on the quantity and quality of water available in space and in time, and because many of the uses are physically linked through the basin hydrology, managing water resources can be more efficient using a comprehensive, basin-wide approach. For example, the objectives of a basin-wide plan may be to: foster economic growth, maintain environmental quality, achieve agricultural self sufficiency, enhance foreign export trade, promote regional developmentlautonomy, increase employment, provide resources for a growing population, improve quality of life, retain national security, meet energy demands, and improve public health (Loucks, 1981). Some of these objectives are compatible, others are conflicting. Information about the tradeoffs made when choosing between objectives is needed to make rational, informed management decisions. River basin models can prove an indispensable tool for aiding in the decisionmaking process.

Models offer a simplified representation of problems that enable information to be processed quickly and efficiently. Models are often used to predict and evaluate the outcomes of alternative policies, and reveal social and economic trade-offT (Haith and Loucks, 1976). For example, models can be used to determine the optimal size, location, and type of water development projects (Technical Co-operation, 1990), to meet a community's needs. Models can also be used to evaluate projects both jointly and individually based on their cost effectiveness and marginal contribution to society, and can reveal the