Date of Award

2015

Degree Type

Dissertation

Degree Name

Doctor of Philosophy in Environmental and Natural Resources Economics

Department

Environmental & Natural Resource Economics

First Advisor

Hirotsugu Uchida

Abstract

Co-management has been recognized as an important scheme in successfully governing common-pool resources (Ostrom, 1990, 2002). Contrary to Hardin’s Tragedy of the Commons (1968) or Olson’s Logic of Collective Action (1965), empirical research has found many long-lasting self-governing communities through extensive case studies (Baland & Platteau, 1996; Ostrom, 1990; Wade, 1989). This is no exception in fishery (Pinkerton, 1994). Fishery cooperatives, where fishermen collectively manage the fishery, have been garnering much attention from both regulators and academics (Costello, 2012; Deacon, 2012; Townsend, Shotton, & Uchida, 2008). In fact, Northeast multispecies groundfish fishery in US has implemented a sector management system, in which voluntarily formed sub-groups of harvesters may manage their collective total share of the harvest as a group right (Pinto da Silva & Kitts, 2006). Thus, understanding how and why fishery co-management succeeds is not only important but also timely in terms of policy relevance.

The overarching goal of this dissertation is to investigate how co-management in a fishery can contribute to better societal outcomes. To meet this goal, I construct the following two objectives and the hypotheses associated with each objective. The first objective corresponds to manuscript 1, and the second objective spans over manuscripts 2 and 3.

The first objective is to examine how common property management systems may emerge endogenously. In particular, recent trends in fisheries management are to further devolve responsibility to users by partitioning allowable extraction and assigning them to groups of users. Each group may manage their collective share of the harvest of each species as a group right, which results in a fishery with a single set of total allowable catch concurrently managed by multiple management groups. I designed a laboratory experiment based on the Rhode Island Fluke Sector Pilot Program, which features a sector managed by individual quota and a common pool derby for harvesters who do not join the sector. I allowed harvesters to choose whether to join the individual quota sector prior to each season based on the outcomes they experience under each system. The main hypothesis is that subjects move toward the individual quota system, which supports the efficient harvesting strategy as equilibrium, rather than adopt cooperative strategies in a less restrictive common pool institution, or stay in an inefficiently operating common pool. I then associate individual variation in the rate of moving to the individual quota system with other-regarding preferences, risk preferences, and a taste for competition.

Through successive fishing seasons, the frequency of subjects' choosing the individual quota sector rises from half to over 80 percent of subjects. This suggests that the efficiencies associated with strong individual fishing rights may emerge endogenously from the sectorization process, even without imposing them through regulation. The results also find enjoyment of competition becomes significant at later seasons, but other-regarding preferences and risk preferences are not a significant driver in the long run.

The second objective is to explain why and how revenue sharing arrangement in a co-managed fishery can achieve successful management and to provide insights into revenue sharing arrangement as an alternative management tool. Under revenue sharing arrangement a group of harvesters shares catch and/or revenue among members of a fishery cooperative equally, or according to an agreed rule, regardless of individual effort or performance. Social capital potentially affects the efficiency that revenue sharing brings while revenue sharing can foster social capital, which could eventually lead to better management outcomes. I hypothesize the synergy between the two factors, i.e., revenue sharing arrangement and social capital. An important intermediary between the two factors and the outcomes is collective efforts performed as a group often in a community-managed fishery. The following four hypotheses will be tested under this objective. First, the fishery groups under revenue sharing arrangement achieve better outcomes in a fishery, compared with similar groups without such arrangement. Second, the fishery groups with greater social capital achieve better outcomes in a fishery. Third, the interaction between revenue sharing arrangement and social capital further enhances success in a fishery. Lastly, the groups under revenue sharing arrangement foster greater social capital.

I quantified social capital using controlled economic experiments with fisherman subjects as well as surveys. Using the data collected from ten fishery groups engaging in a small-scale trawl fishery in northern Japan and wild cluster bootstrap for small sample inference, I find the indirect effect of revenue sharing augmenting information network, which then improves an economic outcome in a fishery. Revenue sharing arrangement provides disincentives to compete and accompanies synchronized collective fishing operation, which encourages fishers to exchange sensitive fishing information that would not have been shared otherwise. This greater information network then has a positive impact on economic performance because it enables fishery groups to effectively coordinate in fishing efforts and other collective efforts. However, the direct effect of revenue sharing improving an outcome does not seem to be robust. In addition, I find evidence of various aspects of social capital improving both outcomes in a fishery. While trust increases the ex-vessel prices, the groups with fishers having similar information network size achieve better stock conditions over time. Interestingly, revenue sharing fishers are no more likely to cooperate unconditionally (i.e., unilaterally) and furthermore they are less likely to cooperate conditionally (i.e., only if others cooperate).

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