International Trade and Management of Shared Renewable Resource
This paper examines the effects of international trade and resource management in a two-country model where each country controls domestic harvest to prevent over-exploitation of an internationally shared renewable resource (e.g., fishery resources). We show that contrary to conventional wisdom, an opening up of trade is likely to raise the steady state utility of a resource-good exporting country, even if it implements weak resource management standards, because the expansion of the resource sector which enjoys economic rent increases its total income. To maximize world welfare in a trading steady state, a resource-good importing country should implement stricter resource management after trade than under autarky but it will implement weak resource management to enjoy economic rent by mitigating the contraction of the resource sector (i.e., rent shifting). Thus, a resource-good exporting country should give some side payments to give a resource-good importing country an incentive to implement strict resource management standards. Keywords: Gains from trade; Shared renewable resource; Resource management JEL Classification: F11; Q27
|Date of creation:||Oct 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Welthandelsplatz 1, 1020 Vienna, Austria|
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hotte, Louis & Long, Ngo Van & Tian, Huilan, 2000. "International trade with endogenous enforcement of property rights," Journal of Development Economics, Elsevier, vol. 62(1), pages 25-54, June.
- James Brander & M. Scott Taylor, 1997.
"International Trade Between Consumer and Conservationist Countries,"
NBER Working Papers
6006, National Bureau of Economic Research, Inc.
- Brander, James A. & Scott Taylor, M., 1997. "International trade between consumer and conservationist countries," Resource and Energy Economics, Elsevier, vol. 19(4), pages 267-297, November.
- Naoto Jinji, 2007. "International trade and renewable resources under asymmetries of resource abundance and resource management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(4), pages 621-642, August.
- Erwin Bulte & Richard Damania, 2005.
"A note on trade liberalization and common pool resources,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 38(3), pages 883-899, August.
- Bulte, E.H. & Damania, R., 2005. "A note on trade liberalization and common pool resources," Other publications TiSEM ec5e2be5-3071-4001-9b6a-8, Tilburg University, School of Economics and Management.
- Brian R. Copeland & M. Scott Taylor, 2009.
"Trade, Tragedy, and the Commons,"
American Economic Review,
American Economic Association, vol. 99(3), pages 725-49, June.
- Ali Emami & Richard S. Johnston, 2000. "Unilateral Resource Management in a Two-Country General Equilibrium Model of Trade in a Renewable Fishery Resource," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 161-172.
- Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-74, September.
- James A. Brander & M. Scott Taylor, 1996.
"Open Access Renewable Resources: Trade and Trade Policy in a Two-CountryModel,"
NBER Working Papers
5474, National Bureau of Economic Research, Inc.
- Brander, James A. & Scott Taylor, M., 1998. "Open access renewable resources: Trade and trade policy in a two-country model," Journal of International Economics, Elsevier, vol. 44(2), pages 181-209, April.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa12p72. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.