Trawling for subsidies: the alignment of incentives between fishermen and marine biologists

Abstract

In the fishing industry, fishermen traditionally have incentives to signal too many fish in the sea in order to have access to a high short-term catch level and subsidies, whereas marine biologists have incentives to signal too few fish in the sea. Marine biologists have an incentive to maximize their budgets both for altruistic reasons (to restore fish stocks) and for private reasons (by increasing demand for their services). We analyse the outcome of a game where the biologists and the fishermen are informed about the true stock size while the decision-maker is not. Our model shows that interest groups, traditionally perceived as opponents, may have mutual interests. Solving the current deadlocks in the EU fishery negotiations highlights the need to reveal the true incentives that motivate stakeholders, such as the symbiosis and alignment of interests identified here.

Keywords:

• Coalition model
• EU
• fishery
• interest groups
• political economy

ACKNOWLEDGEMENTS

We thank two anonymous referees for helpful comments. A great note of gratitude goes to Martin Paldam for suggesting a political economy approach to this topic, and Else Løvdal Nielsen for secretarial and editorial assistance. An earlier version of this paper was presented at the European Public Choice Conference in Turku, Finland (April, 2006). Special thanks to Christian Bjørnskov, Peter Nannestad, Bernd Hayo and the other participants.

Notes

The bootlegger and Baptist theory is based on colourful tales of state efforts to regulate alcoholic beverages by banning Sunday sales at legal outlets. The Baptist community eagerly approved such actions on moral grounds. Bootleggers accepted these regulations happily because the effect was to limit competition. See also Ackerman and Hassler (1981); Yandle (1983); Daugbjerg and Svendsen (2001); Svendsen (2003; 1998).

The ICES (2005) defines a minimum spawning stock biomass (SSB) benchmark (the biomass limit reference point). If stocks are reduced below this level, there is an increased risk that the stock will collapse. According to the ICES (2005), collapse means that the stock has reached a level of severely reduced productivity. Hence, collapse relates to the reduced possibility of commercial fishery. Recovery to an improved status is likely to be slow and dependent on effective conservation measures. However, it does not mean that a stock is at high risk of biological extinction.

Collapsing stock is defined as what cannot be harvested commercially for a number of periods regardless of which recovery measure is employed.

The EU fishing industry comprises about 260,000 fishermen and 1.5 million in associated industries, making it the world's third largest fishing power after China and Peru (Jones 2001: 228).

In certain regions such as the Atlantic coasts Spain and the east coasts of Italy and Scotland, fishing accounts for about 10 per cent of employment (Nello 2005: 248). Political concern is predominant in spite of the fact that fishing can be a very lucrative occupation indeed even if earnings fluctuate considerably.