Impacts of Fishery Regulation on Local Economic Welfare

General equilibrium tragedy of the commons (IADB)

Funding Agencies: Inter-American Development Bank (IADB), The David and Lucile Packard Foundation Grant 2014-40350, The World Bank, and the National Institute of Food and Agriculture (NIFA).

Objective: To understand the impact of fishery regulation and interventions on fisher and non-fisher households in fishing communities.

Methods: Bioeconomic modeling and local economy-wide impact evaluation (LEWIE)

Approach: We integrate bio-economic models of fisheries with general equilibrium (GE) models of fishing communities, constructed from micro-survey data.

Key findings: Fishing activities have strong linkages with other sectors in local economies. Because of this, unmanaged resources cause inefficient allocations of inputs across all sectors, and the effects of resource management spill into other sectors, creating a GE Tragedy of the Commons. Compensating losers is likely to be a prerequisite to the successful implementation of sustainable resource management measures in poor economies. Governments and donors need to consider impacts beyond the resource-extracting households. They also should consider environmental consequences of policies that do not focus on resource conservation. In a Philippine fishing community that is a net importer of fish, we show that a government cash transfer program initially increases real incomes for all households. However, increased demand for fish leads to a decline in the local fish stock that reduces program benefits. Household groups experience declines in real income benefits of 2–63%, with fishing households suffering the largest declines.

Articles:

Manning, Dale T., J. Edward Taylor, and James E. Wilen. "General equilibrium tragedy of the commons." Environmental and resource economics 69, no. 1 (2018): 75-101.

Gilliland, Ted E., James N. Sanchirico, and J. Edward Taylor. "An integrated bioeconomic local economy-wide assessment of the environmental impacts of poverty programs." Proceedings of the National Academy of Sciences 116, no. 14 (2019): 6737-6742.

MI design