Eco-regional Cartels on the Genetic Resource Market and the case of the Andean Community's legislation

Sarah Winands and Karin Holm-Müller

No 163046, Discussion Papers from University of Bonn, Institute for Food and Resource Economics

Abstract: The United Nations' Convention on Biological Diversity raised expectations of high benefits in genetic resource trade with megadiverse countries. As a reaction the Andean Community (CAN) passed strict community access legislation. Against this background the main objective of this paper is to investigate whether public eco-regional cartels of megadiverse countries on the genetic resource market can increase the appropriable benefits from biodiversity. We analyse how cartel design affects cartel benefits and discuss the benefit distribution among cartel members. As a case study we examine the CAN community access legislation (Decision 391) in the light of biodiversity collusion. Our main finding is that cartels-contrary to their negative connotation-are potentially able to stimulate genetic resource trade, increase the providers' appropriable benefits from biodiversity, and reduce the costs for customers. This depends largely on the cartel design and the ability to attract bioprospecting agents. A member's benefit share rises in the member's relative biodiversity richness and even more in the quality of the institutional environment. The CAN collusion nullifies its market power by a deterringly overly strict access regulation and a lack of internal cooperation.

Keywords: Environmental Economics and Policy; Industrial Organization; Institutional and Behavioral Economics; International Relations/Trade; Political Economy (search for similar items in EconPapers)
Pages: 34
Date: 2014-01-30
New Economics Papers: this item is included in nep-cdm, nep-env, nep-law and nep-sog
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubfred:163046

DOI: 10.22004/ag.econ.163046

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