Monitoring Privatized Non-exclusive Resources

Kazi Ali Toufique
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Kazi Ali Toufique: Research Director, Bangladesh Institute of Development Studies (BIDS)

Bangladesh Development Studies, 2000, vol. 26, issue 4, 115-121

Abstract: Cheung (1968) has shown that sharecropping is as efficient as other forms of contract when transaction cost is zero. Cheung (1970) extended his analysis from agriculture to the problem of contracting in a non-exclusive resource, particularly, marine fisheries. In the former he showed that the alleged inefficiency of share-contract (the "tax-equivalent approach") is "only asserted" (Cheung 1968, p. 1109) because the tenant receives rent. In the latter he showed that the alleged rent dissipation argument is also an "asserted not a derived result" (Cheung 1970, p. 59). He has shown that rent dissipates in a non-exclusive resource because the last entrant receives no residual rent. Cheung (1970), however, overlooked a derivable result that the cost of monitoring tenants (in fisheries, fisher's) input - a major drawback of Cheung's fixing up of the tax-equivalent approach - is avoidable if an exclusive fisheries resource is exploited under share-contract. This paper derives the result that if a non-exclusive resource is privatized then the rent-maximizing owner of that resource does not have to monitor the input applied by the users of the resource. We will describe this situation as a quasi open access equflibrvum (hereafter, QOAE

Keywords: Fishers; Resource ownership; Fishing grounds; Fishery resources; Agricultural resources; Employee compensation; Fisheries; Development studies; Total revenue; Crops (search for similar items in EconPapers)
JEL-codes: A12 (search for similar items in EconPapers)
Date: 2000
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