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Don't Leave the Regulator Alone in the Commons: How Fishing Cooperatives Can Help Ameliorate Inefficiencies

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Abstract

This paper examines a common-pool resource where quotas and fines are set by a regulator, an artisanal organization (cooperative), or both. We analyze the interaction between the policies of both regulatory agencies under an inflexible policy regime, where quotas and fines can be revised across periods, and under an inflexible policy regime, where they cannot. We show that inefficiencies arise in the inflexible regime, but they are eliminated when the two agencies coexist. We then extend our model to a setting where regulator and artisanal organization have misaligned preferences, demonstrating that both agencies are still preferable when the stock regenerates rapidly, but a single agency is preferable otherwise.

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  • Rosas-Munoz, Juan & Espinola-Arredondo, Ana & Munoz-Garcia, Felix, 2022. "Don't Leave the Regulator Alone in the Commons: How Fishing Cooperatives Can Help Ameliorate Inefficiencies," Working Papers 2022-1, School of Economic Sciences, Washington State University.
    • Handle: RePEc:ris:wsuwpa:2022_001
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    1. Rong Zhou & Kathleen Segerson, 2016. "Individual vs. Collective Approaches to Fisheries Management," Marine Resource Economics, University of Chicago Press, vol. 31(2), pages 165-192.
    2. Mason, Charles F & Polasky, Stephen, 1994. "Entry Deterrence in the Commons," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 507-525, May.
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    5. Carlos Chavez & Hugo Salgado, 2005. "Individual Transferable Quota Markets under Illegal Fishing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(3), pages 303-324, July.
    6. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    7. Matthew J. Kotchen & Kathleen Segerson, 2019. "On the use of group performance and rights for environmental protection and resource management," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(12), pages 5285-5292, March.
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    More about this item

    Keywords

    Common-pool resource; regulation; artisanal organization; flexible policy; inflexible policy; inefficiencies;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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