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Natural Resource Industries, ‘Tragedy of the Commons’ and the Case of Chilean Salmon Farming

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  • Michiko Iizuka

    () (UNU-MERIT)

  • Jorge Katz

    () (University of Chile)

Abstract

Chilean salmon farming has been considered as an outstanding example of success after growing at double digit rates for more than twenty years. While the expansion was indeed dramatic, it came at the expense of severe sanitary and environmental deterioration. The outbreak in 2008 of the infectious salmon anaemia, a viral disease that kills salmon, but does not affect humans, has made this utterly clear. The overexploitation of the ‘commons’ upon which the industry has grown and the lack of an adequate regulatory mechanism to monitor adverse environmental effects contributed to this disaster, which now threatens the future of the industry and the country benefiting from its natural comparative advantage for salmon farming. The paper shows that activities based on the exploitation of a common pool resource require quite a different analytical approach than the one conventional neoclassical theory offers us for the understanding of firm and industry behaviour. This study shows that industries of this sort enjoy unique location-specific conditions requiring specific know how, R&D, and strong public-private cooperation in order to attain environmentally sustainable long term growth.

Suggested Citation

  • Michiko Iizuka & Jorge Katz, 2011. "Natural Resource Industries, ‘Tragedy of the Commons’ and the Case of Chilean Salmon Farming," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(2), pages 259-286, July.
  • Handle: RePEc:umk:journl:v:3:y:2011:i:2:p:259-286
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    References listed on IDEAS

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    1. Agrawal, Arun, 2001. "Common Property Institutions and Sustainable Governance of Resources," World Development, Elsevier, vol. 29(10), pages 1649-1672, October.
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    7. von Tunzelmann, Nick & Wang, Qing, 2007. "Capabilities and production theory," Structural Change and Economic Dynamics, Elsevier, vol. 18(2), pages 192-211, June.
    8. Rajah Rasiah, 2009. "Sanjaya Lall: The Scholar and the Policy Advisor," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 1(1), pages 8-22, June.
    9. Athukorala, Prema-chandra & Sen, Kunal, 1998. "Processed food exports from developing countries: patterns and determinants," Food Policy, Elsevier, vol. 23(1), pages 41-54, February.
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    Citations

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    Cited by:

    1. Simplice A. Asongu, 2013. "Fighting Corruption when Existing Corruption-Control Levels Count: What do Wealth-Effects Tell us in Africa?," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(3), pages 53-74, October.
    2. Little, Cedric & Felzensztein, Christian & Gimmon, Eli & Muñoz, Pablo, 2015. "The business management of the Chilean salmon farming industry," Marine Policy, Elsevier, vol. 54(C), pages 108-117.
    3. Rajah Rasiah & Jebamalai Vinanchiarachi, 2013. "Institutional Support and Technological Upgrading: Evidence from Dynamic Clusters in Latin America and Asia," World Economic Review, World Economics Association, vol. 2013(2), pages 1-24, February.
    4. Simplice A, Asongu, 2012. "Fighting software piracy: which IPRs laws (treaties) matter in Africa?," MPRA Paper 43590, University Library of Munich, Germany.
    5. Agbo, Maxime, 2014. "Strategic exploitation with learning and heterogeneous beliefs," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 126-140.
    6. Iizuka, Michiko & Katz, Jorge, 2012. "Globalization and the changing institution for sustainability: The case of the Salmon farming industry in Chile," MERIT Working Papers 063, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Iizuka, Michiko & Soete, Luc, 2011. "Catching up in the 21st century: Globalization, knowledge & capabilities in Latin America, a case for natural resource based activities," MERIT Working Papers 071, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Michiko Iizuka & Jorge Katz, 2015. "Globalisation, Sustainability and the Role of Institutions: The Case of the Chilean Salmon Industry," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 106(2), pages 140-153, April.

    More about this item

    Keywords

    - Chilean salmon farming; common pool resources; natural resource based industry; ‘tragedy of the commons’;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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