Tragedy, Property Rights, and the Commons: Investigating the Causal Relationship from Institutions to Ecosystem Collapse

Abstract

Do private property rights mitigate overexploitation of common pool resources, and if so, under which circumstances? In this paper, we examine the effects of private property rights on the status of marine fisheries by combining data on ecological, economic and institutional characteristics into a panel data set, spanning over 50 years, 170 exclusive economic zones and 800 species. To address the inherent endogeneity problem of policy implementation, we employ both a differencein-differences (DiD) and instrumental variable (IV) strategy. Results from both estimations suggest that property rights lower the probability of a fish stock collapsing, but the effect varies with country and species characteristics. Specifically, we find evidence suggesting that property rights are more effective when ownership is transferable, the general level of ownership protection is strong, trade openness is high, the regenerative capacity of the resource is high, and the species value is high.

The I, the T or the Q? Which fishing opportunity attributes are associated with sustainable fishing?

“…While our study addresses many of the confounding issues in previous literature, several limitations remain. First, we cannot guarantee that our control and treatment fisheries are similar, for example regional circumstances may differ even for adjacent regions 25 , or that fisheries undergoing management change may undergo transitions due to a current or recent fisheries collapse 15,26 . Second, the scope of this study is limited to governmental policy, and thus in our classification method we relied on the legal definitions of fisheries management systems.…”

“…Sensitivity analyses: Due to a potential delay between management change and sustainable fishing 15 , we included trend indicators for mortality and biomass to assess whether stocks that did not meet sustainable fishing metrics were trending toward the threshold. When a stock was experiencing overfishing (i.e., F/Fmsy >1.1), but the level of F/Fmsy was lower compared to the average of the previous three years, the observation was recorded as decreasing mortality.…”

“…Allocating fishing opportunities to individuals empowers fishers to choose when to use them 12 , including during lower impact fishing seasons, however the common-pool aspect of fish stocks and thus the incentive for individuals to fish more remains 10 . Transferability in fishing opportunities will lead to concentration in the hands of the most profitable businesses 6,13 who may be more likely to pay for management 14 of a smaller fleet 15 , but profitability is not synonymous with efficiency given unaccounted for externalities 7,16 , and transferability of fishing opportunities and fleet contraction can still occur through vessel sale if quota trade is prohibited.…”

Do Environmental Markets Improve on Open Access? Evidence from California Groundwater Rights

“…A larger literature exists for fisheries, reflecting the many instances of market-based management in that domain. These papers have found that rights-based management tends to reduce effort (Hsueh, 2017;Costello and Grainger, 2018;Isaksen and Richter, 2018), distribute effort more evenly across time (Birkenbach, Kaczan and Smith, 2017); and increase resource levels (Costello, Gaines and Lynham, 2008), efficiency (Grafton et al, 2011), and revenues (Scheld, Anderson and Uchida, 2012). 7 For groundwater in particular, Drysdale and Hendricks (2018) and McLaughlin (2020) find reduced water use and higher groundwater levels, respectively, following the introduction of a water market.…”

Do Environmental Markets Improve on Open Access? Evidence from California Groundwater Rights

“…A larger literature exists for fisheries, reflecting the many instances of market-based management in that domain. These papers have found that rights-based management tends to reduce effort (Hsueh, 2017;Costello and Grainger, 2018;Isaksen and Richter, 2018), distribute effort more evenly across time (Birkenbach, Kaczan and Smith, 2017); and increase resource levels (Costello, Gaines and Lynham, 2008), efficiency (Grafton et al, 2011), and revenues (Scheld, Anderson and Uchida, 2012). 7 For groundwater in particular, Drysdale and Hendricks (2018) and McLaughlin (2020) find reduced water use and higher groundwater levels, respectively, following the introduction of a water market.…”