The Role of Social and Technical Excludability for the Success of Impure Public Good and Common Pool Agreements: The Case of International Fisheries

Michael Finus (), Raoul Schneider and Pedro Pintassilgo ()
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Raoul Schneider: Ulm University, Germany
Pedro Pintassilgo: University of Algarve, Portugal

No 2019-12, Graz Economics Papers from University of Graz, Department of Economics

Abstract: We argue that international fisheries are a prime example to study the incentive structure of forming impure public good and common pool agreements. We consider a fully integrated multiple zone model, in which zones are linked through density-dependent migration. The incentive to accede to Regional Fishery Management Organizations (RFMOs) is related to multiple characteristics. Firstly, the relative patch sizes of the high seas, which is the internationally (publicly) accessible domain, compared to exclusive economic zones, which are state-owned (privately owned). This can be related to the degree of socially constructed excludability. Secondly, the intensity of fish migration between various zones, which can be related to the degree of technical excludability. Thirdly, the growth rate of the resource, which can be interpreted as the degree of rivalry, with a low (high) degree of rivalry approximating public good (common pool) features. We show that normally excludability reduces free-rider incentives but also the need for cooperation, a variant of the paradox of cooperation . Moreover, our model allows us to analyze the benefit-cost duality between public goods and common pool resources. We show that the duality generally holds except for some extreme parameter values in which a low degree of rivalry fosters the success of cooperation. Finally, through a variation of the diffusion matrix, we can also analyze a closed as well as a sinksource system.

Keywords: Pure and impure public goods and common pool resources; technical and socially constructed non-excludability; benefit-cost duality of public goods and common pool resources; property rights; shared fish stocks; regional fisheries management organizations; free-riding (search for similar items in EconPapers)
JEL-codes: C72 F53 H87 Q22 (search for similar items in EconPapers)
Date: 2019-10
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