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Design principles for individual transferable quotas


  • Townsend, Ralph E.
  • McColl, James
  • Young, Michael D.


Individual transferable quota (ITQ) institutions should be designed to minimize two types of transaction costs. First, to minimize the costs of transferring ITQ rights among rights-holders and users, rights should be separated into three components: a permanent entitlement share, an annual catch allocation, and a license to fish. Second, ITQ rights can reduce the transactions costs for development of self-governance by owners both by specifying a non-unanimous voting rule (preferably one-share/one-vote) and also by delineating clear standards for devolution of responsibility from government. These same two principles for reduction of transactions costs can be applied, with slight variation, to individual transferable input systems.

Suggested Citation

  • Townsend, Ralph E. & McColl, James & Young, Michael D., 2006. "Design principles for individual transferable quotas," Marine Policy, Elsevier, vol. 30(2), pages 131-141, March.
  • Handle: RePEc:eee:marpol:v:30:y:2006:i:2:p:131-141

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    References listed on IDEAS

    1. Robert Deacon & Charles Kolstad & Allen Kneese & David Brookshire & David Scrogin & Anthony Fisher & Michael Ward & Kerry Smith & James Wilen, 1998. "Research Trends and Opportunities in Environmental and Natural Resource Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 383-397, April.
    2. Copes, Parzival, 1970. "The Backward-Bending Supply Curve Of The Fishing Industry," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(1), pages 69-77, February.
    3. Clark, Colin W. & Munro, Gordon R., 1975. "The economics of fishing and modern capital theory: A simplified approach," Journal of Environmental Economics and Management, Elsevier, vol. 2(2), pages 92-106, December.
    4. Clark, Colin W & Clarke, Frank H & Munro, Gordon R, 1979. "The Optimal Exploitation of Renewable Resource Stocks: Problems of Irreversible Investment," Econometrica, Econometric Society, vol. 47(1), pages 25-47, January.
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    Cited by:

    1. Ralph E. Townsend, 2010. "Transactions costs as an obstacle to fisheries self-governance in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), pages 301-320, July.
    2. Coglan, Louisa & Pascoe, Sean, 2015. "Corporate-cooperative management of fisheries: A potential alternative governance structure for low value small fisheries?," Marine Policy, Elsevier, vol. 57(C), pages 27-35.
    3. Townsend, Ralph E., 2010. "Transactions costs as an obstacle to fisheries self-governance in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), September.
    4. Lawrence J. White, 2006. "The Fishery as a Watery Commons: Lessons from the Experiences of Other Public Policy Areas for US Fisheries Policy," Working Papers 06-18, New York University, Leonard N. Stern School of Business, Department of Economics.
    5. Pierce, Brett & Mozumder, Pallab, 2014. "Perceptions and preferences of commercial fishers for dedicated access privilege framework in a multispecies fishery," Marine Policy, Elsevier, vol. 45(C), pages 52-59.


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