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Overharvesting the traditional fishery with a captured regulator

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  • Berck, Peter
  • Costello, Christopher

Abstract

Rent dissipation in open access fisheries is a well studied problem (Gordon 1954; Homans and Wilen 1997). Regulation is seen as a possibly remedy to the externality of entry, which eventually leads to zero profits and depressed stocks. Despite regulation, drastic declines have occurred in many regulated fisheries worldwide, prompting a discussion of economic, biological, and environmental phenomena that may lead to declines. We explore one case when a regulator permits overfishing in the context of a traditional fishery model. Influenced by industry to reduce effort restrictions, regulators often rely on gear, season length, and other efficiency restrictions to achieve management goals. Under standard assumptions we find that when the regulator is "captured" by the members of the industry, he unambiguously allows overfishing by reaching a lower stock and higher effort than is socially optimal. This steady state has zero rents, but a higher stock and higher effort than the open access steady state.

Suggested Citation

  • Berck, Peter & Costello, Christopher, 2000. "Overharvesting the traditional fishery with a captured regulator," CUDARE Working Papers 43915, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:43915
    DOI: 10.22004/ag.econ.43915
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    References listed on IDEAS

    as
    1. Karpoff, Jonathan M, 1987. "Suboptimal Controls in Common Resource Management: The Case of the Fishery," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 179-194, February.
    2. Homans, Frances R. & Wilen, James E., 1997. "A Model of Regulated Open Access Resource Use," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 1-21, January.
    3. 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.
    4. Berck, Peter & Perloff, Jeffrey M, 1984. "An Open-Access Fishery with Rational Expectations," Econometrica, Econometric Society, vol. 52(2), pages 489-506, March.
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