Chair of Innovation, Competition Policy and New Institutional Economics

2012-02

Number
2012-02
Authors
Martin F. Quaas, Max T. Stöven
Title
Public and private management of renewable resources: Who gains, who loses?
Abstract Renewable resources provide society with resource rent and surpluses for resource users (the processing industry, consumers) and owners of production factors (capital and labor employed in resource harvesting). We show that resource users and factor owners may favor inefficiently high harvest rates up to open-access levels. This may explain why public resource management is often very inefficient. We further show that privatizing inefficiently managed resources would cause losses for resource users and factor owners, unless (a) the stock is severely depleted and (b) the discount rate is low. We quantify our results for the Northeast Arctic Cod fishery.

Keywords: resource rent, consumer surplus, worker surplus, distribution, political economy

JEL classification: Q28, D33, D72, Q57
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