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Development in a Dual Economy: The Importance of Resource-Use Regulation


  • Frederik Noack
  • Marie-Catherine Riekhof
  • Martin Quaas


We study how rights-based resource management can trigger labor reallocation and development in a dual economy. Under open access, resource users may remain trapped in poverty. Regulation of resource use generates rents that can finance labor reallocation to resource-independent production. Transferability of harvest quotas broadens the scope for labor reallocation, in particular if harvest quotas are distributed unequally. Once the process of labor reallocation is started, it continues until a long-run efficient labor allocation is achieved. We use data from an Indian fishery to illustrate numerically how the design and distribution of harvest quotas affects labor, wealth, and resource dynamics in a rural economy.

Suggested Citation

  • Frederik Noack & Marie-Catherine Riekhof & Martin Quaas, 2018. "Development in a Dual Economy: The Importance of Resource-Use Regulation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(1), pages 233-263.
  • Handle: RePEc:ucp:jaerec:doi:10.1086/694222
    DOI: 10.1086/694222

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    Cited by:

    1. Ichiroh Daitoh & Nori Tarui, 2019. "Open Access Renewable Resources, Urban Unemployment, and the Resolution of Dual Institutional Failures," Working Papers 201906, University of Hawaii at Manoa, Department of Economics.

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