Reforming Fisheries: Lessons from a Self-Selected Cooperative

Abstract:     
We analyze a policy experiment in an Alaskan commercial fishery that assigned a portion of an overall catch quota to a voluntary cooperative, with the remainder exploited competitively by those choosing to fish independently. Unlike the individual quota system advocated by many economists, the policy encouraged coordinated fishing and did not require a detailed assignment of rights. We model the decision to join and behavior under cooperative and independent fishing. The data confirm our key predictions: the coop attracted the least skilled fishermen, consolidated and coordinated effort among its most efficient members, and provided shared infrastructure. We estimate that the resulting rent gains were at least 33 percent. Some independents were disadvantaged by the coop’s formation, however, prompting them to oppose it in court. We study the source of their disadvantage, and our analysis provides guidance for designing fishery reform that leads to Pareto improvements, enabling reform without losers.

Keywords: Fishery management, property rights, cooperatives

JEL Classification: Q22, D23, L23

Accepted Paper Series