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Inspection, Compliance and Violation: A Case of Fisheries

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  • Kofi Otumawu-Apreku

    (School of Economics, University of Adelaide)

Abstract

The presence of illegal, unregulated and unreported (IUU) fishing activities is considered a serious barrier to the sustainable use of marine resources. This paper uses a game theoretic approach to investigate the strategic interaction between fishers and management in the presence of IUU fishing. Managers choose a combination of fines, inspection probabilities and whether to classify a firm as group 1 or group 2, to induce a target level of compliance from fishers who choose whether or not to comply. Importantly, this paper finds that equilibrium compliance strategies of fishers affect stock levels over time. In particular, even using less than perfect monitoring and enforcement can lower illegal harvesting, which is beneficial for stocks. The paper further shows that increasing the cost of engaging in illegal activities, through punishment, may be a sound economic policy. The results, however, suggest that the punishment should be bounded in order to achieve the purpose for which it is intended.

Suggested Citation

  • Kofi Otumawu-Apreku, 2013. "Inspection, Compliance and Violation: A Case of Fisheries," School of Economics and Public Policy Working Papers 2013-17, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2013-17
    as

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    References listed on IDEAS

    as
    1. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62(2), pages 124-124.
    2. Clark, Colin W, 1973. "Profit Maximization and the Extinction of Animal Species," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 950-961, July-Aug..
    3. Harford, Jon D., 1991. "Measurement error and state-dependent pollution control enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 67-81, July.
    4. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
    5. Stokke, Olav Schram, 2009. "Trade measures and the combat of IUU fishing: Institutional interplay and effective governance in the Northeast Atlantic," Marine Policy, Elsevier, vol. 33(2), pages 339-349, March.
    6. Ragnar Arnason, 1990. "Minimum Information Management in Fisheries," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 630-653, August.
    7. Eckert, Heather, 2004. "Inspections, warnings, and compliance: the case of petroleum storage regulation," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 232-259, March.
    8. Christopher Costello & John Lynham & Sarah E. Lester & Steven D. Gaines, 2010. "Economic Incentives and Global Fisheries Sustainability," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 299-318, October.
    9. Gallic, Bertrand Le & Cox, Anthony, 2006. "An economic analysis of illegal, unreported and unregulated (IUU) fishing: Key drivers and possible solutions," Marine Policy, Elsevier, vol. 30(6), pages 689-695, November.
    10. Gibson, Clark C. & Williams, John T. & Ostrom, Elinor, 2005. "Local Enforcement and Better Forests," World Development, Elsevier, vol. 33(2), pages 273-284, February.
    11. Raymond, Mark, 1999. "Enforcement leverage when penalties are restricted: a reconsideration under asymmetric information," Journal of Public Economics, Elsevier, vol. 73(2), pages 289-295, August.
    12. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 9, pages 178-203, Palgrave Macmillan.
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    More about this item

    Keywords

    IUU fishing; game theoretic approach; inspection; violation and compliance; punishment; fish biomass; sustainability;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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