Jonathan Adler on common-pool resources

Lynne Kiesling

Case Western law professor Jonathan Adler (someone to whom I link frequently here) is guest blogging for Megan McArdle at the Atlantic right now, and he’s sharing some valuable insights from his research in environmental and administrative law. His first post lays a foundation by summarizing and analyzing Garrett Hardin’s seminal “tragedy of the commons” work and the important relationship between property rights and the ability and incentive to overuse a common-pool resource. One thing that Jonathan’s analysis incorporates into Hardin’s is a recognition of the public choice/political economy dynamics that affect the incentives and ultimate outcomes in resource policy:

One thing that Hardin overlooked is that the political process often replicates the same economic dynamic that encourages the tragedy of the commons — a dynamic fostered by the ability to capture concentrated benefits while dispersing the costs. Like the herder who has an incentive to put out yet one more animal to graze, each interest group has every incentive to seek special benefits through the political process, while dispersing the costs of providing those benefits to the public at large. Just as no herder has adequate incentive to withhold from grazing one more animal, no interest group has adequate incentive to forego its turn to obtain concentrated benefits at public expense. No interest group has adequate incentive to put the interests of the whole ahead of the interests of the few. The logic of collective action discourages investments in sound public policy just as it discourages investments in sound ecological stewardship. This, in addition to the pervasiveness of special-interest rent seeking, explains many of the failings of centralized regulation. So despite the environmental gains of the past half-century, real challenges remain, and the tragedy of the commons is still with us.

This insight leads directly into his second post, which applies this foundation to fisheries. Many fisheries are in grave threat because of poor management and the failure of both governments and fishery trade associations to establish policies that define use rights within the common-pool resource; the impending collapse of the Atlantic bluefin tuna fishery is the appalling poster child for this problem.

It does not have to be this way. Even before Hardin wrote his essay fishery economists had diagnosed the problem and explained how property rights in fisheries could solve the problem. Specifically by recognizing property rights in a percentage of the catch for a given species (or, in some cases, by recognizing rights in fishing territories), the “race to catch” could be eliminated and fishing crews could be given an incentive to husband the resource. The creation of property rights in the underlying resource aligns the incentives of those who work in the fishery with the health of the fishery. As owners of a share in the catch year-after-year, the fishers have a stake in ensuring there are more fish tomorrow than there are today.

Jonathan’s two posts capture nicely the theoretical and practical issues in devising use rights to enable sustainability in a common-pool resource, and the extensive research that has been done on the effect of catch shares in various fisheries (his discussion of the Alaska crab fishery and the TV show The Deadliest Catch is illustrative).

Highly recommended reading, with a few more posts to come from him during his guest stint.

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4 thoughts on “Jonathan Adler on common-pool resources

  1. Interestingly, the Maine lobster fishery is beset by the inverse of this problem. Due to traditional conservation practices, the population of lobsters is rising, and so is the harvest. This leads to collapsing prices, which harm the lobstermen. Trevor Curson, who’s written extensively about the issue, wrote three years ago (also in the AM) that:

    Lobstermen might be better off now if they’d been more disciplined in the past, by catching fewer lobsters and making sure that they protected the status of their premium live-lobster brand. They’d be in trouble now, too, but they’d have fewer lobsters on hand to worry about unloading at rock-bottom prices.
    What lobstermen in the Gulf of Maine should be doing is coordinating with each other to cut back their catch, fish fewer traps, and market the heck out of their lobsters as a highly-desirable item of sustainable seafood.

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