Overcoming the common pool problem through voluntary cooperation: the rise and fall of a fishery cooperative
We analyze a seldom used, but highly promising form of rights-based management over common pool resources that involves the self-selection of heterogeneous fishermen into sectors. The fishery management regime assigns one portion of an overall catch quota to a voluntary cooperative, with the remainder exploited as a commons by those choosing to fish independently. Data from an Alaska commercial salmon fishery confirm our model's key predictions, that the co-op would facilitate the consolidation of fishing effort, coordination of harvest activities, sharing of information and provision of shared infrastructure. We estimate that the resulting rent gains were at least 25%. A lawsuit filed by two disgruntled independents led to the co-op'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 suggests a structure that enables reform without losers.
We are indebted to Mark Stichert of the Alaska Department of Fish and Game for helping us acquire necessary data. This research was supported by a grant from the Paul Allen Family Foundation. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.