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Low, High and Super Congestion of an Open-Access Resource: Impact under Autarky and Trade, with Aquaculture as Illustration

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  • Schiff, Maurice

Abstract

Analysis of open-access common-property natural resource (NR) has occurred under “low” congestion (LC) – where 𝐴𝐶 and 𝑀𝐶 increase with output 𝑄 – and has for the most part ignored the more important congestion categories where 𝐴𝐶 (𝑀𝐶) is backward-bending (negative) and welfare and NR losses are significantly greater. This paper identifies two such categories, “high” (HC) and “super” (SC) congestion, and examines the impact of open access on steady-state welfare, NR, employment, output and price in a general equilibrium model. Main findings are: i) Welfare and NR costs (and optimal taxes) are a multiple or orders of magnitude greater under HC and (especially) SC than under LC, with trade further – and always – reducing an open-access exporter’s NR and welfare. These results are robust to alternative parameter values and functional forms and greatly increase the importance of regulation; ii) An optimal tax raises price and reduces output under autarky in the case of LC and HC but reduces price and raises output under SC, with significantly larger gains; iii) Studies conducted under LC show trade between open-access developing country C1 and regulated but otherwise identical C2 reduces C1’s welfare and both C1’s and global NR, and though the same holds under HC, the opposite holds under SC; iv) Trade between two open-access countries – say, a developing and an emerging one – with different externality (population) levels raises global output and welfare, improves NR’s global efficiency, raises (does not affect) its level, and reduces international inequality; and v) Emigration’s welfare gain is much larger under SC than under LC, especially if migration results in LC after migration. Application to other issues and policy implications are provided.

Suggested Citation

  • Schiff, Maurice, 2018. "Low, High and Super Congestion of an Open-Access Resource: Impact under Autarky and Trade, with Aquaculture as Illustration," GLO Discussion Paper Series 263, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:263
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    References listed on IDEAS

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    1. Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-874, September.
    2. Copes, Parzival, 1970. "The Backward-Bending Supply Curve Of The Fishing Industry," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(1), pages 69-77, February.
    3. Bhagwati, Jagdish N, 1969. "Optimal Policies and Immiserizing Growth," American Economic Review, American Economic Association, vol. 59(5), pages 967-970, December.
    4. James A. Brander & M. Scott Taylor, 1997. "International Trade and Open-Access Renewable Resources: The Small Open Economy Case," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 526-552, August.
    5. Gautam, Amy Buss & Strand+, Ivar & Kirkley++, James, 1996. "Leisure/Labor Tradeoffs: The Backward-Bending Labor Supply in Fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 352-367, November.
    6. Anthony Scott, 1955. "The Fishery: The Objectives of Sole Ownership," Journal of Political Economy, University of Chicago Press, vol. 63, pages 116-116.
    7. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124-124.
    8. Jagdish Bhagwati, 1958. "Immiserizing Growth: A Geometrical Note," Review of Economic Studies, Oxford University Press, vol. 25(3), pages 201-205.
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    More about this item

    Keywords

    Open Access; natural resource; unexamined high congestion; autarky and trade; aquaculture;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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