When a community authorizes the development of a controversial project which may produce adverse ecological effects, the decision may be made on the basis of a differing geographical distribution of costs and benefits. Local benefits may exceed local costs while overall costs exceed overall benefits. This paper attempts, through a mathematical theoretical exposition, to show that this situation provides a rational incentive for hypocritical public behavior. Possible solutions are considered. One set of solutions implies return to laissez-fairetype capitalism and the maintenance of a taut, spatial economic system which is sensitive to shock. Another set of solutions implies the development of a socialist economy. Mixed solutions are presented as unstable and tending to environmental deterioration. The mirrorimage problem — of concentrated costs and diffused benefits in the United States, and the State of New Jersey specifically — is also considered, leading to similar conclusions.
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