Efficiency Advantages of Grandfathering in Rights-Based Fisheries Management

Gary. D. Libecap (), Terry Anderson () and Ragnar Arnason ()

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: We show that grandfathering fishing rights to local users or recognizing first possessions is more dynamically efficient than auctions of such rights. It is often argued that auctions allocate rights to the highest-valued users and thereby maximize resource rents. We counter that rents are not fixed in situ, but rather depend additionally upon the innovation, investment, and collective actions of fishers, who discover and enhance stocks and convert them into valuable goods and services. Our analysis shows how grandfathering increases rents by raising expected rates of return for investment, lowering the cost of capital, and providing incentives for collective action.

Keywords: Fishing rights; property rights; allocating fishing rights; grandfathering fishing rights; auctions of fishing rights; fisheries rent (search for similar items in EconPapers)
JEL-codes: D23 K11 N22 Q0 Q22 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-12
New Economics Papers: this item is included in nep-agr, nep-env, nep-reg and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:31-2010

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