An Elemental Basis of Property Rights to Marine Fishery Resources

Among the questions that ecosystem-based management raises for economists is how to partition uses of the many biological, chemical and physical attributes of marine ecosystems into sets of property rights that undergird total ocean wealth. An elemental basis of property rights for fisheries involves the interplay between ecological and technological interactions, including sideeffects (externalities), and transaction costs. Fisheries management typically divides ownership by species. Divided ownership is efficient where production requires specialized skills and technologies and/or where interactions are negligible. When damages caused by side-effects are substantial, divided ownership might be used either by attenuating (e.g., gear restrictions) or excluding (e.g., zoning) a subset of attribute rights, provided that the opportunity (reduced output) and transaction costs of restrictions/exclusions are less than damages in their absence. However, uncertainty about resource dynamics, the recurrent nature of interactions, the complexity of numerous contractual stipulations owing to multi-attribute resources, and practical enforcement problems make it likely that the transaction costs of divided ownership are great at this time. Alternatively, property rights could be bundled into sets wherein tradeoffs across margins which promote the total wealth of a multi-attribute, common pool asset would be decided internally by a governance organization. Bundled sets of property rights influence the choice of organizational structures (government agency, commons, unitization of firms) and contracts (fishery management plans, rules, private contracts). The discussion is illustrated with examples from U.S. fisheries in the Northeast Region.