The problem of describing the energy-lowering associated with polarization of interacting molecules is considered in the overlapping regime for self-consistent field wavefunctions. The existing approach of solving for absolutely localized molecular orbital (ALMO) coefficients that are block-diagonal in the fragments is shown based on formal grounds and practical calculations to often overestimate the strength of polarization effects. A new approach using a minimal basis of polarized orthogonal local MOs (polMOs) is developed as an alternative.
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