A Tale of Two Clams

Abstract

The effect of command-and-control regulation of fisheries has been serious economic inefficiencies, safety hazards, detriments to the ecosystem, and failure to protect marine resources. Those results have provoked interest in the use of tradable property rights - known in fisheries as individual transferable quotas (ITQs) - to regulate marine resources. Initial research into the adoption of ITQs suggests the change dramatically boosts productivity. But, because of policy anticipation and efforts to game the implementation of an ITQ system, a simple comparison of productivity immediately before and after the official adoption of ITQs would yield an exaggerated measure of the actual productivity gains realized. The gains from ITQs are real, but they are smaller than what other researchers have claimed.

Keywords: fisheries, marine, marine resoureces, property rights, tradeable property rights, individual transferable quotas, ITQ, ITQs

JEL Classification: K11, L66, Q22