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Regulation of Renewable Resources in Federal Systems: The Case of Fishery in th EU

Author

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  • Frank Jensen

    () (Institute of Local Government Studies, Denmark)

  • Niels Vestergaard

    () (Department of Environmental and Business Economics, University of Southern Denmark)

Abstract

The EU regulation of fisheries is decided in two levels. The level of the total allowable catch (TAC) for the most important species is decided every year by the Council of Minsters. The TACs are allocated to the Member States as quotas. The Member States determine who is going to harvest the quota. There is, however, an information problem associated with this structure. It does not take into account how efficient fishermen in different countries are. In this paper we model the information problem as an adverse selection problem and analyse an EU tax coupled to effort as an alternative to the TAC system. We work with the hypothesis that EU suffers from a fiscal illusion and includes tax revenue in the objective function in order to finance other, also inefficient, operations. Even in the light of these imperfections there are at least two reasons for recommending an EU tax. First, it can be used to correct part of the market failure associated with fishery. Second, it can be used to secure correct revealation of types in the light of asymmetric information.

Suggested Citation

  • Frank Jensen & Niels Vestergaard, 1999. "Regulation of Renewable Resources in Federal Systems: The Case of Fishery in th EU," Working Papers 3/99, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
  • Handle: RePEc:sdk:wpaper:3
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    File URL: http://www.sdu.dk/~/media/Files/Om_SDU/Institutter/Miljo/ime/wp/Jensen3.ashx
    File Function: First version, 1999-07
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    References listed on IDEAS

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    1. Farrell, Joseph, 1987. "Information and the Coase Theorem," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 113-129, Fall.
    2. Rob, Rafael, 1989. "Pollution claim settlements under private information," Journal of Economic Theory, Elsevier, vol. 47(2), pages 307-333, April.
    3. Partha Dasgupta & Peter Hammond & Eric Maskin, 1980. "On Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Oxford University Press, vol. 47(5), pages 857-860.
    4. Evan Kwerel, 1977. "To Tell the Truth: Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 595-601.
    5. Peter Klibanoff & Jonathan Morduch, 1995. "Decentralization, Externalities, and Efficiency," Review of Economic Studies, Oxford University Press, vol. 62(2), pages 223-247.
    6. List, John A. & Mason, Charles F., 2001. "Optimal Institutional Arrangements for Transboundary Pollutants in a Second-Best World: Evidence from a Differential Game with Asymmetric Players," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 277-296, November.
    7. Gordon R. Munro, 1996. "Approaches to the Economics of the Management of High Seas Fishery Resources: A Summary," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 157-164, April.
    8. List, John A. & Gerking, Shelby D., 1996. "Optimal Institutional Arrangements for Pollution Control," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 0(Issue 1), pages 1-21.
    9. Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208.
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    Cited by:

    1. Paulo Reis Mourao, 2008. "Towards a Puviani’s Fiscal Illusion Index," Hacienda Pública Española, IEF, vol. 187(4), pages 49-86, December.
    2. Frank Jensen & Niels Vestergaard, 2000. "Moral Hazard Problems in Fisheries Regulation: The Case og Illegal Landings," Working Papers 9/00, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    3. Jensen, Frank & Vestergaard, Niels, 2002. "Moral hazard problems in fisheries regulation: the case of illegal landings and discard," Resource and Energy Economics, Elsevier, vol. 24(4), pages 281-299, November.
    4. Mourão, Paulo, 2007. "Towards a Fiscal Illusion Index," MPRA Paper 9760, University Library of Munich, Germany, revised 28 Jul 2008.
    5. Frank Jensen, 2001. "A Critical Review of the Fisheries Policy: Total Allowable Catches and Rations for Cod in the North Sea," Working Papers 16/01, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.

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