The polarization energy in intermolecular interactions treated by self-consistent field electronic structure theory is often evaluated using a constraint that the atomic orbital (AO) to molecular orbital transformation is blocked by fragments. This approach is tied to AO basis sets, overestimates polarization energies in the overlapping regime, particularly in large AO basis sets, and lacks a useful complete basis set limit. These problems are addressed by the construction of polarization subspaces based on the responses of isolated fragments to weak electric fields. These subspaces are spanned by fragment electric-field response functions, which can capture effects up to the dipole (D), or quadrupole (DQ) level, or beyond. Schemes are presented for the creation of both non-orthogonal and orthogonal fragment subspaces, and the basis set convergence of the polarization energies computed using these spaces is assessed. Numerical calculations for the water dimer, water-Na(+), water-Mg(2+), water-F(-), and water-Cl(-) show that the non-orthogonal DQ model is very satisfactory, with small differences relative to the orthogonalized model. Additionally, we prove a fundamental difference between the polarization degrees of freedom in the fragment-blocked approaches and in constrained density schemes. Only the former are capable of properly prohibiting charge delocalization during polarization.