Ideologue takes quotas hook, line and sinker

The Privatisation of the Oceans
October 14, 2005

Human exploitation of the world's fisheries is often presented as a paradigmatic case of the so-called tragedy of the commons - fishing vessel operators calculate their marginal utilities of exploitation without regard for the size or productivity of overall fish stocks. With no controls on access, a large number of uncoordinated players converge mercilessly on stocks, and the inevitable result is unsustainable fishing.

Of course, there is a jurisdictional contrast between the high seas, where fish stocks are accessible to anyone, and 200-mile exclusive economic zones, where coastal states have sovereign management rights over marine resources. In practice, as Rognvaldur Hannesson points out, access controls by states to their fish stocks have been so lax that overfishing is as much a problem in coastal waters as on the high seas. Technological progress in locating and extracting stocks has exacerbated matters by causing scarcities in many fisheries.

Hannesson, a Norwegian professor of fishery economics, views the failure of the world's fisheries as a classic tragedy of the commons. He chides those social scientists taking exception to this diagnosis. In accord with the economic theory of property rights, the rising scarcity of fish, he claims, drove countries in the past century to enclose offshore areas: quite simply, the benefits to coastal states of claiming and enforcing ownership exceeded the costs. But having secured extended geographical entitlements to fisheries, states have been ineffectual in utilising them productively.

Hannesson sets out the ways different countries have turned to exclusive-use rights to maximise the economic benefits of their fish stocks. His clear, incisive analysis of various access and utilisation schemes undertaken across the world deserves the engagement of all academics and practitioners preoccupied with the sustainability of fisheries.

The mobility of most commercially valuable fish species rules out territoriality as the basis of use rights. So the economic puzzle is to design entitlements that address a shared resource but that, at the same time, define exclusive rights with individual value. Hannesson's survey covers rights to operate fishing vessels and rights to catch a certain quantity of fish. The latter entitlement - the individual transferable quota (ITQ) - has been most widely applied and, he suggests, appears the most promising vehicle for achieving an efficient exploitation of fish stocks. Success stories include extensive ITQ-managed fisheries in New Zealand and Iceland, as well as stock-specific ITQ initiatives in the US and Canada. Hannesson concedes that some quota-based fisheries have yet to generate enduring economic benefits (for example, the US wreckfish fishery) or recoveries in depleted stocks (Icelandic cod fishing), but ascribes these failures to contingencies outside ITQ mechanisms.

His case for ITQs is suspiciously clear cut: where they appear to work, this is because market forces are unimpeded, even though quotas are heavily conditioned by the state. When they fail in development or implementation, this is due to assorted vested interests. Hannesson berates politicians, judges, unions, aboriginal peoples and environmentalists for opposing ITQs.

Even sea lions enter his cross hairs for having the effrontery to eat fish destined for human consumption. While ITQs are undoubtedly associated with efficiency gains, Hannesson's call to take the politics out of fisheries management sidesteps all too neatly the ideological constitution of his own commitment to privatisation. Even he concedes that the conservation-critical determination of catch limits in ITQ systems is the responsibility of governments. The messy interplay of property rights and political institutions deserves deeper analysis.

Michael Mason is lecturer in environmental geography, London School of Economics.

The Privatisation of the Oceans

Author - Rognvaldur Hannesson
Publisher - MIT Press
Pages - 202
Price - £22.95
ISBN - 0 262 08334 5

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