Efficiency Advantages of Grandfathering in Rights-Based Fisheries Management
AbstractWe show that grandfathering fishing rights to local users or recognizing first possessions is more dynamically efficient than auctions of such rights. It is often argued that auctions allocate rights to the highest-valued users and thereby maximize resource rents. We counter that rents are not fixed in situ, but rather depend additionally upon the innovation, investment, and collective actions of fishers, who discover and enhance stocks and convert them into valuable goods and services. Our analysis shows how grandfathering increases rents by raising expected rates of return for investment, lowering the cost of capital, and providing incentives for collective action.
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Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 31-2010.
Length: 31 pages
Date of creation: Dec 2010
Date of revision:
Fishing rights; property rights; allocating fishing rights; grandfathering fishing rights; auctions of fishing rights; fisheries rent;
Find related papers by JEL classification:
- N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-01-23 (Agricultural Economics)
- NEP-ALL-2011-01-23 (All new papers)
- NEP-ENV-2011-01-23 (Environmental Economics)
- NEP-REG-2011-01-23 (Regulation)
- NEP-RES-2011-01-23 (Resource Economics)
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