Team Inspection in the Management of Common-Pool Resources when Corruption is Present

Abstract

Corrupt enforcement of harvesting restrictions hampers the management of common-pool resources in many developing countries, contributing in particular to widespread illegal fishing and logging. In this paper, we examine a simple intervention that may mitigate the effects of such corruption if, as is often the case due to congestion, stock, or pecuniary externalities, harvesters' effort levels are strategic substitutes. We show that in this case, rather than sending out inspectors individually to each inspect a small subset of harvesters, sending them out as teams, whereby each team inspects a larger subset of harvesters, may be welfare enhancing. The intuition is that, as the ratio of harvesters to inspectors increases, inspectors internalize more of the negative effort externalities between the harvesters they inspect, since those externalities ultimately reduce their own "catch" of bribes. Numerical simulations calibrated to data on fisheries indicate that the resulting welfare improvement can be significant.

Keywords: corruption, common pool resources, enforcement, teams