The role of social and technical excludability for the success of impure public good and common pool agreements: The case of international fisheries

We argue that international fisheries are a prime example to study the incentive structure of forming impure public good and common pool agreements. We consider a fully integrated multiple zone model, in which zones are linked through density-dependent migration. The incentive to accede to Regional Fishery Management Organizations (RFMOs) is related to multiple characteristics. Firstly, the relative patch sizes of the high seas, which is the internationally (publicly) accessible domain, compared to exclusive economic zones, which are state-owned (privately owned). This can be related to the degree of socially constructed excludability. Secondly, the intensity of fish migration between various zones, which can be related to the degree of technical excludability. Thirdly, the growth rate of the resource, which can be interpreted as the degree of rivalry, with a low (high) degree of rivalry approximating public good (common pool) features. We show that, generally, excludability reduces free-riding incentives but also the need for cooperation, a variant of the “paradox of cooperation”. Moreover, we show that the benefit-cost duality between public goods and common pool resources generally holds except for some extreme parameter values for which a low degree of rivalry fosters the success of cooperation. Finally, through a variation of the diffusion matrix, we can also analyze a closed as well as a sink-source system.     

How to Get There From Here: Ecological and Economic Dynamics of Ecosystem Service Provision

Using a bioeconomic model of a coral reef-mangrove-seagrass system, we analyze the dynamic path of incentives to achieve an efficient transition to the steady state levels of fish biomass and mangrove habitat conservation. Our model nests different types of species habitat dependency and allows for changes in the extent of habitat to affect the growth rate and the long-run fish level. We solve the two-control, two-state non-linear optimal control problem numerically and compute the input efficiency frontier characterizing the tradeoff between mangrove habitat and fish population. After identifying the optimal locus on the frontier, we determine the optimal transition path to the frontier from a set of initial conditions to illustrate the necessary investments. Finally, we demonstrate how dynamic conservation incentives (payments for ecosystem services) for a particular habitat with multiple services are interdependent, change over time, and can be greater than contemporaneous fishing profits when the ecosystem is degraded.     

Variable unit costs in an output-regulated industry: The Fishery

Departing from general cost theory of the firm and bioeconomic theory of the fishery, this study contributes with an empirical examination of how variable unit costs in a Norwegian demersal and pelagic fishery depend on output and the fish stock. The identification of the separate effects that the two factors have on costs is not common in the literature. Three Norwegian fleets fishing Norwegian spring spawning herring (Clupea Harengus) and five Norwegian fleets fishing Northeast Arctic cod (Gadus Morhua) are evaluated. The findings indicate that variable unit costs fall in output in both fisheries. The results also show that variable unit costs fall in fish stock in the demersal fishery, but with a stock elasticity of variable unit costs in absolute terms significantly less than 1. These results are of relevance to a manager seeking the optimal harvest rule and to understand fishermen's incentives when individual vessel quotas are reduced.     

Optimal Harvest in an Age Structured Model with Different Fishing Selectivity

An age structured model of a fishery is studied where two fishing fleets, or fishing agents, are targeting two different mature age classes of the fish stock. The agents are using different fishing gear with different fishing selectivity. The model includes young and old mature fish that can be harvested, in addition to an age class of immature fish. The paper describes the optimal harvesting policy under different assumptions on the objectives of the social planner and on fishing selectivity. First, biomass yield is maximized under perfect fishing selectivity, second, equilibrium profit (rent) is maximized under perfect fishing selectivity, and third, equilibrium profit is maximized under imperfect fishing selectivity. The paper provides results that differ significantly from the standard lumped parameter (also surplus production, or biomass) model.     

Fishing Revenue, Productivity and Product Choice in the Alaskan Pollock Fishery

A key element in evaluating fishery management strategies is examining their effects on the economic performance of fishery participants, yet nearly all empirical studies of fisheries focus exclusively on the amount of fish harvested. The economic benefits derived from fish stocks involve the amount of revenue generated from fish processing, which is linked to both the way fish are harvested and the products produced from the fish. In this study we econometrically estimate a flexible revenue function for catcher-processor vessels operating in the Alaskan pollock fishery, recognizing potential endogeneity and a variety of fishing inputs and conditions. We find significant own-price supply responses and product substitutability, and enhanced revenues from increased fishing days and tow duration after a regulatory change introduced property rights through a new fishing cooperative. We also find significant growth in economic productivity, or higher revenues over time after controlling for observed productive factors and price changes, which exceeds that attributable to increased harvest. These patterns suggest that the move to rights-based management has contributed significantly to economic performance in the pollock fishery.     

The Economics of Career Concerns, Part I: Comparing Information Structures

Many incentives in organizations arise not through explicit formal incentive contracts but rather implicitly through career concerns. This paper models career concerns through agents trying to manipulate the market assessment of their future productivity. The information flow from current actions to market assessment is therefore crucial in determining the nature of these incentives. Improved information may either increase or reduce incentives. The impact of information provides a major distinction between the explicit and implicit incentives model. The paper derives general results on comparisons of information structures which serve as counterparts to the standard results on information structures in the principal–agent model: sufficient statistic, impact of a Blackwell garbling, comparison of inclusive information structures.     

INDIVIDUAL SPECIES-STATE ANALYSIS OF NATURESERVE'S "AT-RISK" CATEGORIES: HUNTING AND FISHING'S ROLE

We examine the impact of hunting and fishing on rankings in NatureServe's 2005 "at-risk" list using 24,291 observations on individual vertebrate animal species for 47 states (we omit Alaska, Hawaii, and Missouri). We use 1) a probit analysis of the binary "at-risk" designation and 2) an ordered probit analysis of the five categories of endangerment. We control for species type (mammals, birds, reptiles, amphibians, fish, and turtles), population density, farming area, forest cover, coastline existence, endemism, and per capita income. We find that states with higher hunting and fishing participation (or higher per capita expenditures) have fewer "at-risk" species. States with larger per capita big game spending have fewer "at-risk" non–big game species. States with larger wildlife agency budgets have fewer endangered species. ( JEL Q57)     

Collectives,communes, and incentives

A model of individual-worker incentives in alternative economic organizations—collective, communal, capitalist—is developed. It is demonstrated that, ceteris paribus, incentives are much higher in collectives than in communes, and are likely higher in collectives than in comparable capitalist organizations. The effect on incentives of changes in prices, rent, and organization size is examined, and it is shown that individual incentives in a collective increase with the scale of the organization. The impact of various parameters on hours worked is examined in the framework of utility maximization. The results are compared to those of Domar, Ward, and Vanek.     

Dynamic and Comparative Static Analysis of Imperfectly Competitive International Fishery

A dynamic system for change of fish stock is formulated assuming that two asymmetric rival countries harvest fish from a common fishing ground and sell it in an imperfectly competitive market. The existence of a unique stable steady state is examined based on the dynamic system. Comparative static analysis is conducted in relation to changes in national fishing management policies to explore, among other things, rent-shifting from one country to another.     

Evaluating the effects of area closure for recreational fishing in a coral reef ecosystem: The benefits of an integrated economic and biophysical modeling

This paper presents an integrated agent-based model of recreational fishing behavior within a reef ecosystem as a platform for the evaluation of recreational fishing management strategies. Angler behavior is described using econometrically estimated site choice models, with site choice among anglers driven by site attributes and angler characteristics. The biophysical model represents the marine reef environment as a system with different trophic levels identifying algal and coral growth as well as two types of fish (piscivores and herbivores). Ecosystem dynamics are driven by interactions within the trophic levels and interaction between fish populations and fishing activities.The model is used to simulate recreational fishing activities and their interactions with the environment. Recreational fishing sites from the Ningaloo Marine Park, an iconic coral reef system in Western Australia, are used as a case study. A set of management strategies, including “business-as-usual” and different site closure durations, are assessed for two different levels of fishing pressures. The results show that not only the effectiveness but also the distribution of management impacts across space and over time can be very different from what one would expect without the benefit of integrated modeling.     

Optimum reserve size,fishing induced change in carrying capacity,and phenotypic diversity

Fish stocks around the world are heavily overexploited in spite of fishing policies in several parts of the world designed to limit overfishing. Recent studies have found that the complexity of ecological systems and the diversity of species, as well as negative impact of fishing activities on environmental carrying capacity of fish stocks—all contribute to the problem. A number of biologists, managers, and practitioners strongly support the use of marine reserves as a management strategy for marine conservation. This paper contributes to this line of research by seeking an optimum reserve size and fishing effort for situations where species diversity decrease at fishing grounds and fishing activities impact carrying capacity. We found that a reserve size which maximizes economic rents could ruin a fish stock if fishing impacts are not accounted for. On the other hand, the reserve serves as a bifurcation term which could improve the resilience of a marine ecosystem.     

Lame ducks and divided government: How voters control the unaccountable

Electoral institutions interact through the incentives they provide to policy makers and voters. In this paper divided government is interpreted as the reaction of voters to a systematic control problem. Voters realize that term-limited executives (“lame ducks”) cannot credibly commit to a moderate electoral platform due to missing reelection incentives. By dividing government control voters force a lame duck to compromise on policies with an opposing legislature. Based on data from the US states, I present evidence showing that the probability of divided government is about 8 to 10 percent higher when governors are lame ducks.     

Estimating the impacts of eliminating fisheries subsidies on the small island economy of the Azores

A major problem affecting world fisheries today is overcapacity of which overfishing is both a cause and a consequence. There is a general consensus that fisheries subsidies cause great harm to the resource by exacerbating the problems resulting from the common resource issues of fisheries leading to overexploitation of the resource through a new set of perverse incentives. Many now advocate that subsidies should gradually be terminated, and that capacity enhancing and fuel subsidies should be terminated immediately. On account of the global fisheries crises, highly subsidised fisheries and the anticipated reforms of the European Union's Common Fisheries Policy this study aimed to estimate the impact of eliminating fisheries subsidies on various macro and micro economic variables pertaining to the regional economy of the Azores using a dynamic computable general equilibrium model based on a social accounting matrix. The simulation results suggest that reduction, and in particular, elimination of fisheries subsidies would have a substantial effect on the region, however, the negative social and economic effects would be largely confined to the fishing sector. Conversely, the augmentation of fishery subsidies would benefit the fishing sector with an overall adverse effect on the rest of the economy.     

Fishing in a Shallow Lake: Exploring a Classic Fishery Model in a Habitat with Shallow Lake Dynamics

Renewable resources such as fish exist within habitats. Harvesting activities may directly impact the habitat, beyond the influence caused by changing the balance between species. When harvesting activities impact stock size and habitat health in different ways, both states must be explicitly considered. A classic fisheries model is embedded in a habitat that exhibits shallow lake dynamics, where carrying capacity depends on habitat health and fishing effort damages the habitat. Hysteresis in the habitat dynamics can manifest itself as multiple steady states for both the dynamic and open access solutions. Numerical explorations of the model suggest that a new fishery in such a setting should often be managed to protect the health of the habitat, while it may not be optimal to restore a fishery in an already degraded habitat. Conventional policy tools applied in their classic form are unlikely to be effective.     

Harvesting Preemption, Industrial Concentration and Enclosure of National Marine Fisheries

This paper explores how harvesting technology can affect firms' internalisation of common pool externalities and the incentives for expanding firm's size. Focusing on supply side non-pecuniary externalities, our closed-entry harvesting competition model suggests that when marginal harvesting costs are weakly sensitive to common pool externalities, atomistic competition is likely to remain, other things equal, as the predominant industrial structure in the fishery. The avenue for increasing industrial concentration is modelled via Stackelberg leadership which offers the option of preempting rivals' production. In our static modelling, a fishery subject to Stackelberg signalling results in higher overfishing versus the case of a highly decentralised harvesting sector (proxied by the use of Nash conjectures). Given that static optimising behaviour could be interpreted as a result of entry controls and other fishing regulations being widely perceived as ineffective controls, the obtained overfishing ranking suggests that in fisheries where strategic preemption in production is feasible, but where entry controls and other important regulations on fishing effort are considered to be ineffective, overfishing is likely to remain the predominant outcome, even if other incentives promote evolution towards a more concentrated industry structure. When the fishery is already overpopulated by numerous small firms, whatever advantages large firms may have in terms of profitability, numerous small-scale fishermen tend to make up for in the political arena. This imposes constraints on the politically feasible fishing regulations. We use a second best welfare benchmark to illustrate resulting policy trade-offs.     

DO MOVIE PRODUCTION INCENTIVES GENERATE ECONOMIC DEVELOPMENT?

Movie production incentives (MPIs) are a popular economic development strategy employed by U.S. states. Film subsidies are intended to encourage external investment into a nascent industry that spills over onto complementary industries to generate economic growth through a multiplier. Despite their widespread use, the positive impact of MPIs on state economies has not been documented, and several states have halted their MPI programs due to high costs and questionable efficacy. This study exploits the staggered implementation, suspension, and elimination of film incentive programs across states to estimate the macroeconomic impact of MPIs. Instrumental variable estimates that permit causal inference do not support the hypothesized positive impacts of film incentives on state economies. (JEL H25, H71, L82, R11, R38, Z11, Z18)     

IUU捕捞对渔业资源的损害及港口国的管制措施分析

IUU捕捞是国际海洋渔业资源的公害。港口国可以通过渔船登陆等措施执行防范、遏制与消除IUU捕捞的渔业政策。IUU导致的后果很严重,甚至可以摧毁整个渔业。从事IUU捕捞行为的人都是不负责任的人,它们无视捕鱼纪律和规则,相对于行为端正的渔业人（也即：按照捕鱼规则作业的渔民）,获得了不公平的竞争优势。     

Fisheries Management Under Cyclical Population Dynamics

Cycles in environmental conditions (e.g., sea-surface temperature) directly impact fish growth. This paper extends the classical Gordon-Schaefer fishery model by replacing the constant growth rate with a cyclical growth rate. The optimal harvest rate is shown to fluctuate, but the cycle of the harvest rate lags the cycle of the biological growth function with the highest harvest rate occurring after biological conditions start to decline. Simulations contrast various fishing policies and illustrate the proclivity to crash a fishery if it is wrongfully managed as if there is a constant growth rate with i.i.d. environmental shocks. Finally, we show that small cyclical fluctuations in one species can result in large fluctuations in the optimal harvest rate of another species if the fish species are interlinked through predator-prey relationships.      

Dissertation abstract: The experimental analysis of the political economics of fisheries governance

This dissertation focuses on the political economy of fisheries governance. The study develops a formal model of fisheries governance by combining the features of the common pool fishery and the political institution of lobbying; designs a laboratory fishery governance institution and conducts economic experiments to test the hypotheses derived from the formal model. Specifically, the study analyzes how fishing firms invest in efforts to influence fishery regulation and management through voluntary contribution lobbying. The study also analyses and compares contribution and effort behavior in the lobbying and the CPR using data from economic experiments. The results indicate that lobbying to change suboptimal fishery regulations was significantly below the subgame perfect equilibrium prediction and contributions to raise the cap were significantly different than contributions to lower the cap toward the social optimum. Study results show that subjects successfully lobbied to raise inefficiently low fishing quotas, but were unable to lobby to reduce inefficiently high fishing quotas. Detailed analysis of subjects’ contribution and effort behavior suggest that despite the interesting benefit-cost duality between pure public goods and CPRs, the pattern of cooperative behavior in these two social dilemma situations was different and the level of cooperation in the voluntary contribution lobbying experiment was lower than those reported in other public goods experiments. To provide external validity to these experimental findings, the study further analyzes and compares lobbying expenditures in the fishery sector with those in other natural resource industries using field data from the United States. A comparison of actual lobbying expenditures as percentage of valued added shows that lobbying effort in the U.S fishery sector is not significantly different than those in other natural resource industries such as mining and electric utility industries, but the pattern of lobbying is different. Whereas fishing firms lobby through associations or pressure groups, firms in other natural resource industries lobby unilaterally. This observation suggests that differences in industrial structure and incentives influence the pattern of lobbying and the lobbying behavior of firms across industries. The theoretical predictions derived from the formal model of fisheries governance are consistent with our experimental findings and with the field data on lobbying in the US fisheries sector. These findings suggest that heterogeneity drives rent-seeking activities in the US fisheries sector and that fishing firms attempt to circumvent political collective action problems by forming and lobbying through associations of stakeholders with relatively homogenous policy preferences. JEL Classification D22, D72, D78, H41 Advisor: Prof. Jon G. Sutinen     

Ecological and economic sustainability in fishery management: A multi-agent model for understanding competition and cooperation

Recent studies have shown that many marine ecosystems are experiencing an accelerating loss of population and biodiversity. It is apparent that there is a growing disparity between the available supply of fish and the desire of the growing world population to catch them. Although studies have begun to question the ecological sustainability of managed fishery systems, they often omit the corresponding effects on the economic sustainability of fishery industries. This is particularly important in rural coastal areas where the fishing industry is often a dominant employer. In this article, we analyze the interactions between economic and ecological dynamic systems using a multi-agent dynamic model of fishery management. Multiple agents (fishers) harvest multiple fish species and adapt the amount and allocation of their effort to their value functions, which are given as net profits of the fish harvest sold for a market price. This is largely unique in fishery models, since many econometric studies view fishers as represented by homogenous ‘average’ agents. We introduce and compare two different decision rules governing the behavior of fishers engaged in a competitive market. We demonstrate a situation where both behaviors lead to a decline of all fish stocks, as well as profits for most fishers. As an alternative, we introduce a cooperative approach in which fisheries jointly set sustainable limits for total harvest and effort that are then distributed to the fishers according to distribution rules. The simulation reveals that fish stocks and profits can stabilize at significantly higher levels in the cooperative case, leading to a continuous accumulation of capital for all fishers. This model demonstrates key aspects of overfishing conflicts that can be overcome through planned fishing quotas and cooperative market mechanisms. It also demonstrates a novel approach for simulating the dynamic behavior of heterogeneous fishers.