Reforming Fisheries: Lessons from a Self-selected Cooperative
Abstract: We analyze a policy experiment in an Alaskan commercial fishery that represents a promising way to reform the management of mobile natural resources. Unlike the individual quota system advocated by many economists, the policy explicitly encouraged coordinated fishing and did not require a detailed assignment of rights. One portion of an overall catch quota was assigned to a voluntary cooperative, with the remainder exploited competitively by those choosing to fish independently. We model the decision to join and behavior under cooperative and independent fishing. The data confirm our key predictions: the coop was comprised of the least skilled fishermen, it consolidated and coordinated effort among its most efficient members, and it provided shared infrastructure. We estimate that the resulting rent gains were at least 33 percent. A lawsuit filed by two disadvantaged independents led to the coop’s demise, an outcome also predicted by our model. Our analysis provides guidance for designing fishery reform that leads to Pareto improvements for fishermen of all skill levels, which enables reform without losers.
