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date: 05 May 2021

Economics of Fisheries Conflictsfree

  • Ragnar ArnasonRagnar ArnasonUniversity of Iceland

Summary

Conflicts potentially arise whenever resources are limited relative to what is desired. Conflicts are costly because to engage in them requires resources and they may cause collateral damage. Therefore, humans and other species have developed various means to avoid, deflect, and minimize conflicts. In human society, these means involve (a) customs and traditions, (b) laws and their enforcement, (c) negotiations, and (d) exchange. While analytically separable, these items are clearly interrelated and, in practice, intermingled. Their common element is the delineation and acceptance of property rights. Property rights, if sufficiently enforced, channel conflicts into exchange of valuables, that is, negotiated settlements or trade. This, as is well established in economics, has the added benefit of promoting economic efficiency.

Fisheries conflicts are manifestations of human conflicts in general. It follows that fisheries conflicts are amenable to the same basic analysis as other conflicts. Cases of fisheries conflicts abound in the world. It is probably safe to assert that anytime two or more agents pursue the same fishery conflicts arise. Some of these conflicts are comparatively minor, such as disputes between two fishers about the best fishing spots. Others are more dramatic, involving armed force such as the South Africa abalone conflict. Some involve national states and the application of navies such as the cod wars between Iceland and the United Kingdom and the lobster war between Brazil and France.

Most terrestrial natural resources have long since become subject to property rights, thus reducing conflicts and increasing economic efficiency of their use. This process has been much slower for fish resources, probably due to their relative unobservability and migratory nature. Nevertheless, the past several centuries have seen a creeping expansion of property rights in ocean and aquatic resources. The most noticeable of these developments have been (a) the enlargement of exclusive national economic zones (EEZs) and (b) the establishment of individual harvesting rights, the so-called individual and individual transferable quotas (IQs and ITQs). The enlargement of national EEZs has been going on for centuries. The IQs/ITQs are a much more recent phenomenon emerging in the 1970s. However, since this time, their application has become quite common, with more than a quarter of the global ocean catch being taken under ITQ or ITQ-like systems. It should be noted that an extension of the national EEZ is often a prerequisite for the introduction of ITQs.

Extended EEZs have greatly reduced international conflicts for fish resources. ITQs and similar property-rights based systems have similarly reduced fisheries conflicts between individuals and companies. No less importantly, these individual property rights have promoted cooperation in the joint use of aquatic resources and the gradual transfer of the fishing activity to the most efficient operators, thus greatly enhancing the net economic benefits generated by the fisheries. There are indications that property rights in fisheries are also conducive to a negotiated resolution of conflicts between fishing and other uses of aquatic resources such as mining, recreation, and ecosystem conservation.

Introduction

The study of conflicts is not an obvious one for economics. To be sure, conflicts are a subset of social interactions, many of which are the subject of economics. However, conflicts, virtually by definition, do not involve voluntary trades and prices, which is the traditional field for economic analysis. Seen from this perspective, conflicts might seem a more apt subject for some of the other social sciences, such as political science or even sociology.

However, there are good reasons to apply economic methodology to the study of conflicts. First, much human conflict is about valuable things. In fact, since engaging in conflict obviously requires the use of valuable resources, one might conjecture that all conflicts must be about even greater valuables. How to use and allocate valuable resources is central to economics. Second, as mentioned, to engage in conflicts requires resources. These resources could have been used for something else. So, conflicts are costly. Third, often conflicts get in the way of the most beneficial use of the resources that are the subject of the conflict. This applies not the least to conflicts about the use of renewable natural resources such as fisheries. For all these reasons, it appears that many conflicts, their evolution, and their resolution, have major economic implications. This certainly justifies a special economics of conflicts and, more specifically, economics of fisheries conflicts.

In addition, it may be noted that the chief scientific tool to understand, explain, and predict the course of conflicts, game theory, has to a great extent been developed and applied within economics. Since 1994, at least nine game theorists have been awarded the Nobel Prize in Economics.1 This demonstrates the perceived importance of game theory for economic theory as well as the appreciation, by top-level economists, of game theory as a tool for economic analysis.2

While the economic analysis of conflicts, with its heavy reliance on game theory, is necessarily somewhat complex and technical, this article, to the extent possible, avoids the use of technical arguments and detailed analysis. Most of the findings presented here, however, rest on rigorous prior analysis. For those who would like to examine these sources, an attempt has been made to provide useful references.

A few words about terminological conventions in this article. The term resources, which is frequently used in the article, refers to any valuable input. Fisheries take place both in fresh water on land and in the ocean. To cover both, the term aquatic is used. There might be a question of what qualifies as a conflict. In this article conflicts are defined to cover the entire continuum from mild irritation to armed clashes or worse.

This remainder of this article is organized broadly as follows: The next section considers human conflicts in general terms. This helps to set the stage for the more detailed examination of fisheries conflicts. The ensuing section examines fisheries conflicts specifically. It starts with a classification of fisheries conflicts, is followed by a few empirical examples of actual fisheries conflicts, and ends with a discussion of how fisheries conflicts may be resolved. The final section summarizes the main conclusions of the article.

On Conflicts in General

It appears helpful to begin this examination of fisheries conflicts with a broader look at human conflicts. This is because fishery conflicts are just particular manifestations of conflicts in general. They have the same fundamental causes, and evolve and are resolved in similar ways as other human conflicts. Fishery conflicts differ from other conflicts only insofar as fisheries differ from other human activities. Thus, instead of getting immediately bogged down in the details of actual fishery conflicts, it appears more practical to start with a broader view. This makes it easier to lay out certain general principles of conflicts that also apply to fisheries conflicts.

The Inevitability of Conflicts

It appears that conflicts stem from two fundamental sources; (a) nature of living beings and (b) limitations of nature.

Living beings desire and, therefore, strive for resources. If they did not, they would not survive for long. All these resources come directly or indirectly from nature. Natural resources, at least some of them, are limited. If they were unlimited, living beings could, and probably would, expand (in population or consumption or both) until some resource limitation would emerge and check their expansion.3

If resources are in limited supply, in economic terminology they are said to be scarce. Scarce resources are valuable. They are valuable to individuals constrained by the scarcity. This value is measured by their subjective gain in benefits if one more unit of the resource were to become available to them. This is referred to by economists as the shadow value of the resource in question. It is easy to see that if a resource is abundant (not scarce), its shadow value must be zero.4 For if it were positive, individuals would simply obtain more of the resource until they were satiated and the shadow value of the resource became zero. This is the reason why the shadow value of oxygen in the environment, although necessary for survival, is normally zero.

Those holding a positive shadow value of a resource will be willing to devote other resources up to this value to obtain a unit of the scarce resource. In other words, they will be willing to incur costs to obtain the resource. Often there are many individuals in this situation, that is, coveting more of the same resource. Therefore, almost inevitably, conflicts between them arise. Some are defending what they have. Others are trying to get more.

This, in a nutshell, is the source of human and, indeed, animal conflicts. There are wants. Resources are insufficient to satisfy these wants. Therefore, the resources become valuable. Therefore, it pays to devote other resources to obtain and keep them. Therefore, in many cases, it is found to be the best course of action to engage in fights with others for these resources. In this sense, conflicts are an inevitable consequence of living beings and the limitations of nature.

The inevitability of conflicts explains why they are so ubiquitous both in human and animal societies. Conflicts can be seen everywhere. Birds fight for nesting space. Predators fight for carcasses. Many, perhaps all, species fight for mating rights. Children fight for toys. Spouses fight about how to spend limited time and other joint resources. Labor and owners of capital fight for shares in the net surplus produced. Companies fight for market share. Politicians fight for state power and states fight for global power and influence. Fishery conflicts, conflicts for limited fish and related aquatic resources, are merely a specific type of human conflict.

While the combination of living beings and limited resources implies conflicts, it should be kept in mind that the intensity of these conflicts may vary a great deal, from mild irritation to physical confrontation. Thus, analytically, it is useful to measure the intensity of conflicts along a continuum from zero to infinity. By and large, the more resources are applied to the conflict, the more intense they are.

Cost of Conflicts

To engage in conflicts requires resources. It is, in other words, costly. Presumably, this cost increases with the intensity of the conflict. Therefore, interestingly, this cost serves as a check on the intensity of conflicts. Simply put, it does not pay for an agent to put too many resources into a conflict. The expected benefits of engaging in the conflict must exceed the cost. On the other hand, from the agent’s perspective, it pays to invest resources to the conflict up to the expected benefits from the conflict. This simple cost-benefit analysis applies to each of the parties. It follows that it is entirely possible that the total expenditure on engaging in the conflict exceeds the total value of the resource subject to conflict.

Now, while expenditures on engaging in a conflict may well be justified from the perspective of the individual parties, from the overall perspective the situation is different. All expenditures on conflicts are wasted in the sense that they only affect the sharing of the resource that is fought over and do not (usually) create any new value. Therefore, from the perspective of total benefits it would be optimal to avoid the conflict altogether. In fact, the evolution of human societies is in many respects characterized by increasingly more sophisticated ways to avoid or reduce the cost of conflicts.

The costs of conflicts are not only the private resources spent by the parties to the conflict. Some of the costs are social in terms of reduced social cohesion, increased antagonism leading to weakening of social bonds, and even social fission. Another potentially important cost of conflicts that is not necessarily counted by individual parties to the conflict are the foregone benefits of cooperation. This type of costs appears in particular in conflicts about the use of renewable natural resources.

Evolution of Conflicts

Conflicts can evolve in a great variety of ways depending on many factors. Among the obvious factors are (a) characteristics of the participants, (b) the means at their disposal, (c) the value of the subject of the conflict, (d) constraints on feasible moves, and, not the least, (e) the strategy selected by the players. Because of this complexity, it is virtually impossible to predict the evolution of a conflict with a reasonable degree of confidence. All we can say is that conflicts normally have an identifiable beginning (although the roots may be deep) and they often tend toward a resolution, although this may be far in the future.

The key science for understanding conflicts is referred to as game theory. This was originally developed in the 1940s and early 1950s primarily by von Neumann and Morgenstern (1944) and Nash (1950, 1953). Subsequently, important strides forward have been taken by several authors. A good source on game theory is Aumann and Hart (1992).

In game theory, two fundamental types of games are envisaged. One is competitive games, where the participants (players) act independently to maximize their share of the benefits much as happens in actual conflicts. The other is cooperative games, where each player seeks to attain the best possible agreement with the other players. Although the aim is to reach the best agreement, the moves the players make to secure that, that is, the negotiations, can be seen as conflicts. While the distinction between competitive and bargaining games is useful for analytical purposes, it should be kept in mind that these are ideal types and many actual games exhibit the features of both and one type of game may evolve into the other. There are various applications of game theory to fishery conflicts, both international fishery conflicts between nations (Gronbaek et al., 2020; Levhari & Mirman, 1980; Munro, 1979) and fishery games between fishers (Bjorndal Scott, 1988; Hannesson, 2011).

An important concept in game theory is the value of the game. This measures the total value the payers can get if they make the appropriate moves. In this regard, two types of games are identified, zero sum games and positive sum games. In the former game, they players can only share a given value. This is the fixed cake problem. In the other type, positive sum games, the players can increase their total benefits if they make the correct moves. These two types of games are illustrated in Figure 1.

The diagrams in Figure 1 illustrate the benefits to two players, A and B. The benefits to player A are measured along the vertical axis and those to player B along the horizontal axis. The shaded area measures what is possible. Amin and Amax indicate what benefits the players can get acting on their own.

In the first game in the diagram, any gains to one of the players represents a reduction in the benefits of the other player. In other words, it is not possible to increase the benefits to one player without reducing the benefits to the other player. This is a zero-sum game.

In the second game, it is possible to increase the benefits to either player without reducing those of the other. It is even possible to simultaneously increase the benefits of both players. So, this is a positive-sum game. Whether the players actually realize the possible additional benefits depends on whether they make the right moves. One such set of moves is to reach an agreement.

Figure 1. Zero and positive sum games.

Game theory is somewhat preoccupied with the outcome of the game referred to as the equilibrium of the game. Less attention is paid to the evolution of the games. Presumably, this is because the equilibrium outcomes are much easier to determine than the way the game (or conflict) actually evolves. For this reason, game theory is of limited use in explaining and predicting the evolution of conflicts.

Conflict Resolution

Given the potentially very high cost of conflicts, it is imperative for societies and their cohesion to resolve them before too much cost is incurred. Therefore, it is no surprise that human societies have developed various mechanisms to resolve conflicts and minimize their negative impacts. Among the institutions for this purpose are: (a) customs and traditions, (b) law codes, (c) legal courts, (d) higher authorities, and (e) political systems. Needless to say, these social institutions are often quite intertwined, with one merging into the other.

From the perspective of social well-being, the problem is not merely to resolve conflicts, but to resolve them in the most beneficial (optimal) way. This involves two things. First, the resolution should allocate the resources subject to conflict to the parties in a way that maximizes the total gains from resource utilization. Second, the cost of reaching a resolution and implementing it should be as small as possible. Since the way conflicts are resolved can be very costly, this aspect of the matter is potentially just as important as the conflict resolution itself.

It is important to recognize that conflicts are generally not resolved in a way that they vanish entirely. The resource limitation that was the initial source of the conflict will still prevail and continue to cause friction. Conflict resolution only means that the conflict is converted into a less damaging form. An example of this is a dispute between neighbors. A court verdict may reduce the intensity of the conflict and thus avoid serious damage/costs but a low-intensity conflict is likely to persist.

It is also important to recognize that just as it is costly to engage in conflicts, to pursue a resolution also requires the use of valuable resources. Thus, it is easy to visualize conflicts that are left unresolved because the cost of resolving them exceeds the cost of continuing them.

Property Rights as Means to Conflict Resolution

One social institution for conflict resolution is so pervasive that it deserves special mention. This is the social institution of property rights.5 The social essence of property rights is that the resource belongs to someone and this someone has the sole right to use it and dispose of it. Therefore, provided the property right is respected, there can be no conflict about this particular resource. Of course, if the resource is useful to others, they have an incentive to violate the property right. For that reason, property rights need enforcement. In most societies this is done by various means. Among them are social indoctrination (social custom), legal stipulation (law), and policing. Naturally, the holder of the property right, the owner, has the greatest interest in enforcing it. Depending on the resource and the available enforcement technology, the cost of enforcement may be high. It seems likely that this cost has acted as an upper bound on the expansion of property rights in human societies.

The opposite of private property is common property, that is, resources that do not belong to anyone in particular and are, therefore, open to use by everyone (at least everyone belonging to a specified group). It is well known that common property resources tend to be overused (Gordon, 1954; Hardin, 1968; Scott, 2008) sometimes with devastating consequences.6 More central to the current inquiry, if common property resources are scarce and, therefore, valuable, conflicts over their use are bound to arise, the form and intensity of which will depend on the situation (Arnason, 2009; Scott, 2008).

Property rights are somewhat complicated, consisting of several distinct attributes the most important of which are exclusivity, tradability, durability, and security (Arnason, 2000; Scott, 2008). Any given property right may be endowed with these attributes to a various extent. As a result, property rights are of different quality. There are high-quality property rights and low-quality property rights. A high quality property right is highly (even perfectly) exclusive, tradable, durable, and secure. A low-quality property right possesses relatively low levels of these attributes.

One of the great attractions of property rights as a method for resolving conflicts about resources is that they are conducive to efficient allocation of the resources. This is because property rights, provided they have a degree of transferability, give rise to trades and, therefore, markets and market prices. These prices, as is well-known from basic economic price theory (Debreu, 1959; Smith, 1776/1981), serve as a guidance to the optimal allocation of scarce resource among the population (Adam Smith’s invisible hand). If the property rights are sufficiently high quality and markets sufficiently effective, the subsequent allocation of the resource will be economically efficient in the sense that no other allocation will produce more total value, a situation referred to by economists as Pareto efficient (Debreu, 1959; Varian, 1984).

Even when property rights are not transferable, they can serve as a basis for conflict resolution. According to a famous proposition first formulated by R. Coase (1960), well-defined rights to a resource facilitate the optimal resolution of conflicts about the use of that resource. In fact, according to Coase, if bargaining and other transaction costs are zero, such an optimal agreement will be reached. Now, property rights are, of course, well-defined rights. Therefore, property rights meet the Coase requirement of well-defined rights.

Fisheries Conflicts

All conflicts are costly because resources are needed to conduct them. Fisheries conflicts typically add a very substantial additional cost in the form of misuse (often excessive reduction) of the underlying renewable resources, the fish stocks. To attain the maximum benefits from a fishery it is necessary to follow the optimal extraction path (Clark & Munro, 1975) and, in the long run, maintain the stock, more generally the ecosystem, at the most productive sustainable level. For this to happen, the harvesting by, typically, numerous entities has to be appropriately coordinated. This, obviously, requires a high degree of cooperation between all users. Cooperation is almost the opposite of conflicts. Moreover, with conflicts taking place, the odds are that the necessary cooperation will not be forthcoming. In the quite common case of no cooperation, the attainable net benefits from the fishery will be frittered away by excessive fishing effort and reduced fish stocks (Gordon, 1954; Hardin, 1968).7 A global study by the World Bank indicates that this negative outcome, in fact, characterizes ocean fisheries (World Bank, 2017).

Types of Fisheries Conflicts

Fisheries conflicts are many and varied. Therefore, it may be helpful to arrange them into broad categories. One apparently useful typology is to divide them into the following two categories:

Conflicts among fishers.

Conflicts between fishers and other users of aquatic resources.

One reason why this classification is useful is that widely used methods to resolve fisheries conflicts optimally, such as the ITQ system, are effective for conflicts in the first class and less so in the other.

Conflicts Among Fishers

Fishers are in the business of harvesting catch from fish stocks. At each point in time the available volume of fish is limited. Because of this scarcity, fishers are forced to compete with each other for catch. This competition often leads to conflicts. Although fundamentally about shares in limited catch, these conflicts appear in many forms. They may be about (a) access to the particular fisheries, with some fishers attempting to exclude others, (b) allowable fishing methods, (c) allowable types of vessels and fish gear, (d) how fishing gear may be applied, (e) access to the densest fish concentrations, and so on. There may also be conflicts for fisheries-related services such as for landing space, maintenance facilities, and so forth.

In addition to competition for catch from limited stocks, it should be noted that the unit cost of catch increases when the stock size goes down. Therefore, fishers are not only interested in the volume of their catch but also the size of the fish stocks. Each fisher is harmed by another fisher’s catch in two ways. First, the catch reduces the volume of fish currently available for harvest. Second, it reduces the fish stocks in the future. This observation obviously exacerbates the potential for conflict.

It is important to recognize that fishers are not a homogeneous group. There are many kinds of fishers with different opportunities and, therefore, interests. The relative similarity between some fishers often induces them to form groups or alliances to promote their common interests.

Among the most prominent of these groups are fishers of different nationalities. All fishers would like to remove some of the other fishers from the fishery. For this purpose, fishers from one nation can often enlist the support of their national governments to exclude fishers from other nations from local fishing grounds. The foreign fishers naturally tend to resist and often seek protection from their own governments. This has led to numerous international conflicts about fisheries over the centuries (see the section “International Conflicts”) and since World War II stepwise extensions of national fisheries jurisdictions from three nautical miles to the current norm of 200 nautical miles. This, however, has not solved the problem because certain valuable fish resources reside outside 200 miles and many more periodically migrate between different fisheries jurisdictions and/or to the high seas.

Other fisheries groups that often conflict are (a) large-scale and small-scale fishers, (b) high-technology and low-technology fishers, (c) offshore and inshore fishers, and (d) fishers integrated in a processing/marketing conglomerate and independent fishers. It should be noted that there is considerable, although far from perfect, overlap between these groups. Thus, large-scale fishers also tend to be high-technology, offshore, and part of an integrated fishing company while small-scale fishers tend to be low-technology, inshore, and independent.

Another distinction of great importance between fishers is that between commercial fishers on the one hand and recreational and subsistence fishers on the other hand. Commercial fishers engage in fishing to sell their catch for profits. Their behavior may be described as that which maximizes their profits from fishing. Recreational and subsistence fishers, by contrast, do not sell their catch and are not motivated by profits. The behavior of these two groups of fishers is better described as maximizing their utility by fishing. Moreover, subsistence fishers, who engage in fishing to feed themselves and their families, are usually quite poor and have few alternative economic opportunities. Subsistence fishers are primarily found in underdeveloped economies and typically have limited market access. Furthermore, both recreational and subsistence fishers typically employ less powerful fishing methods than the commercial fishers. For all of these reasons, the conflicts between recreational and subsistence fishers on the one hand and the commercial fishers on the other hand tend to be more difficult to solve than those within the group of commercial fishers.

Conflicts Between Fishers and Other Users of Aquatic Resources

Aquatic resources are used for many purposes other than fishing. Some of these other uses may impact on fishing and vice versa. Prominent among these are aquatic transportation activities, the use of the ocean and other water bodies for dumping of refuse, coastal zone development, the use of aquatic beds for cables and pipes, aquatic mining, aquatic recreation and tourism, aquatic fish farming, and the use of aquatic resources for conservation of aquatic biota and habitat. These other uses of aquatic resources may lead to conflicts with fishers and often do.

Of these, aquatic conservation, that is, the use of aquatic resources for conservation purposes, and certain segments of aquatic tourism (e.g., reef diving, fish viewing) benefit from the state of aquatic ecosystems and are, therefore, affected by fishing. The other activities, that is, aquatic transportation, dumping, mining, coastal zone development, and fish farming, are either indifferent to the state of aquatic ecosystem or would, as fish farming, prefer to minimize aquatic biota in their surroundings.

Many of these other activities have a negative impact on fisheries. Aquatic transportation may interfere with the fishing activity and negatively affect fish stocks by polluting the aquatic environment. Very much the same applies to cables and pipes on the bottom and aquatic mining. Dumping refuse into the aquatic environment is unlikely to interfere directly with fishing but may negatively affect the ecosystem and the productivity of fish stocks. Conservation of aquatic resources has an ambiguous impact on fisheries. It reduces current fishing but positively affects fish stocks, which reduces the cost of fishing and may lead to more volume of catches in the future.

Illustrating the Conflict

As already explained, conflicts in fisheries take many forms. Fundamentally, however, they are about who gets to fish and how much. As a result, they are also about overall fisheries policy, that is, how much to harvest and the size of the fish stocks. As regards these variables, the different types of fishers disagree and fishers as a group disagree with non-fishing groups.

It is possible to illustrate this type of the disagreement between the different users of aquatic resources. For this purpose, consider three groups of fishers: commercial, recreational, and subsistence fishers, and one group of non-fishers: conservationists.8

Figure 2 depicts the fishery in biomass-harvest space. The curve in Figure 2 represents the sustainable yield function. Any point on this curve represents an equilibrium in the sense it can be sustained indefinitely. The maximum sustainable yield corresponds to biomass of unity in the diagram. The unfished size of the biomass, the so-called virgin equilibrium, occurs at zero harvest and biomass equal to two in the diagram.

Figure 2. Possible desired biomass and harvest by different aquatic users.

Restricting attention to equilibrium, it is easy to verify (see Arnason, 2009) that the four groups of aquatic users would in general want different harvest-biomass combinations on the sustainable yield curve. For instance, the conservationists are likely to want the biomass at or close to the virgin stock equilibrium and no harvesting whatsoever.9 The other three groups would want some level of fishing and a smaller equilibrium biomass.10 However, they would normally not want the same equilibrium biomass and harvest.11 What biomass exactly they want depends on the specifics of their situation (Arnason, 2009). The recreational fishers might prefer higher biomass and less total catch than the commercial fishers. The subsistence fishers, because they are likely to have high discount rates and low cost of fishing, might want biomass close to or even below the maximum sustainable yield level as illustrated in the diagram.

The point, however, is not where exactly the different groups of aquatic users would like to see the fishery. The crucial point is that the objectives of these groups almost surely clash, resulting in conflicts of varying degrees of intensity.

What applies to the groups also applies to the agents making up these groups. They are also likely to conflict with agents from the other groups. What is perhaps not as obvious is that the individual agents within each group would in general not prefer the same fisheries equilibrium and therefore there would also be conflicts about fisheries policy within each group.

Empirical Examples of Fisheries Conflicts

Cases of fisheries conflicts abound in the world. It is probably safe to assert that anywhere two or more agents pursue the same fishery, conflicts arise. It follows that the history of fisheries conflicts is probably as long as the history of human fishing, with the latter reaching back at least 40,000 years (Hu et al., 2009) and probably much longer. Some fisheries conflicts are comparatively minor, such as disputes between two fishers about the best fishing spots. Others are more dramatic, involving armed force such as the South Africa abalone conflict. Some involve national states and the application of navies such as the cod wars between Iceland and the United Kingdom and the lobster war between Brazil and France.

In this section, a few empirical cases of fisheries conflicts are presented. While interesting in themselves, the main purpose of reviewing these cases here is to illustrate some of the possible types of fisheries conflicts discussed in previous sections.

International Conflicts

International fishery conflicts are probably those that are most newsworthy. In recent centuries many such conflicts have been recorded. The increase in the frequency of these conflicts seems to have been caused by three developments: (a) improved distant water fishing technology, (b) increased scarcity of fish, and (c) the emergence of the nation-state.

Icelandic Cod Wars (Assertions of Exclusive Fishing Zones). One of the earliest international fishery conflicts recorded in Europe occurred in the early 15th century between England and the joint kingdom of Denmark, Iceland, and Norway (hereafter referred to as the Nordic kingdom) about the cod fishery off Iceland. Fishermen from Britain began fishing for cod off Iceland in the late 14th century (Thorsteinsson, 1976). The fishery proved profitable and expanded fast. In the early 15th century, this led to conflicts with the Icelandic authorities partly because of the fishing itself and partly because of attempts by the Nordic kingdom to dominate cod trading in Europe. This dispute led to considerable altercations and bloody encounters in Iceland with the result that in 1415 the Danish king of the Nordic kingdom formally demanded that King Henry V ban all English fishing off Iceland. This year marks the beginning of the so-called first cod war between Britain and Iceland (Thorsteinsson, 1976). The House of Parliament, however, objected to any arrangement of this kind and the English fishing off Iceland continued unabated, with the concomitant clashes with the Icelandic authorities. This first cod war ended with the English arresting the authorities in Iceland, forcing the Nordic kingdom to agree to continued English fishing off Iceland.

This agreement, however, did not however end cod fishing conflicts between Iceland and the United Kingdom. Between 1429 and 1976, the Icelandic historian Bjorn Thorsteinsson (1976) recounts nine further cod wars between Iceland and the United Kingdom. Of these, five took place before the 20th century and four in the post–World War II period, the latter as a consequence of Iceland’s stepwise extensions of its exclusive fishing zone in 1952, 1958, 1972, and 1975. The last three cod wars involved many clashes between U.K. navy vessels that protected the British trawlers and Icelandic coast guard vessels with some loss of lives (Johannesson, 2006; Thorsteinsson, 1976). The tenth cod war ended in 1976 with the United Kingdom acknowledging Iceland’s 200 nautical mile EEZ.

U.S.–Canada Salmon Conflict (Migratory and Transboundary Fish Stocks). Large salmon stocks spawn in numerous American West Coast rivers from Oregon to Alaska. During their annual spawning migrations to their home rivers, these stocks become subject to intense and very valuable ocean fishing by U.S. and Canadian fishing vessels. During this migratory phase, stocks from the various rivers are mingled, leading to the thorny problem of whose fish is being caught by whom. The problem is further exacerbated by the fact that salmon from Canadian rivers travel long distances along the Alaskan coast, where they become subject to U.S. fishing, and salmon originating in Washington and Oregon typically traverse the Canadian exclusive fishing zone to reach their home rivers.

To avoid serious fisheries conflicts caused by these complications, the United States and Canada in 1930 agreed to the Fraser River Salmon Treaty stipulating a certain sharing of the total catch of the most important salmon species (McDorman, 1998). In 1985, at the request of Canada, which felt that altered conditions including the 200 mile EEZ and the recognition of the state-of-origin principle had rendered the 1930 treaty inequitable, a new treaty, the Pacific Salmon Treaty, was entered into, establishing, inter alia, a specific Pacific Salmon Commission (McDorman, 1998).

Greatly expanded Alaskan fishing for salmon in Alaskan waters in the early 1990s upset the Pacific Salmon Treaty. Because of the heavy fishing of Alaska, Canada could not reach harvesting equity with the United States according to the Treaty by fishing in its own waters—even by catching salmon destined for U.S. rivers farther south. The Pacific Salmon Commission, specifically set up to deal with problems of this kind, proved unable to reach a conclusion (McDorman, 1998; Miller, 2003).

The dispute became quite heated with both public and private actions being undertaken to force through a different solution. As an example of the public actions, in 1994, the Canadian government required that U.S. fishing vessels obtain licenses to traverse through Canadian waters to the Alaska fishing grounds, a step unheard of in the long history of these two nations’ cohabitation. As an example of numerous private incidents, in 1997 an Alaska-bound ferry was blockaded in a Canadian port and one of the blockaders burned the American flag (McDorman, 1998).

An agreement was eventually reached in 1999. This agreement did not replace the 1985 Pacific Salmon Treaty but rather placed additional obligations on the parties and replaced the previous short-term harvest management regimes with new longer-term arrangements (Miller, 2003).

The Brazil–France Lobster War (New Entrants). In 1961, French lobster fishing companies discovered that they could profitably harvest spiny lobster in deep waters (100–200 m depth) over 100 nautical miles off the Brazilian northeast coast. Local lobster fishers, seeing their catches reduced by this fishing of larger and better equipped foreign vessels complained to their government with the result that navy vessels were sent to the fishing ground, ordering the French vessels to leave the continental shelf (Braga, 2004). The French refused and a sent a destroyer to the area to protect the French fishing vessels. There was a standoff and the situation became increasingly tense to the point where, in April 1963, apparently, both nations were considering whether to go to war over this issue (Ziegler, 1987).

The dispute ended with an agreement in December 1964. France acknowledged the Brazil 200-mile fishing zone off its coast, which included the contested territory, and was in return granted fishing privileges in the area for 26 of its lobster vessels for the next 5 years (Lagoni et al., 2011).

Domestic Fisheries Conflicts

A Salmon River Conflict in Iceland Around 920 ad (Private Enforcement). The Icelandic sagas, which primarily recount happenings during the period between 800 and 1000 ad, contain many instances of fishing conflicts, mostly in lakes and rivers but also about sealing and whaling along the marine coastline. These conflicts were often violent, ending in bloodshed and long term feuds.

One famous case is about how a major chieftain in Iceland was killed in one of these conflicts and the ensuing feud (Vatnsdæla Saga; see Sveinsson, 1939). A very productive salmon and trout river, Vatnsdalsá, flowed through the lands of the Viking chief Ingimundur Gamli in Vatnsdalur in Northern Iceland. A dispute arose when another settler in the area, Hrolleifur, claimed rights to fish in the river also. An armed skirmish took place as Ingimundur’s sons attempted to drive him from the river. On being informed of this, Ingimundur, then an old man, rode across the river ordering Hrolleifur to leave. Before leaving, Hrolleifur, however, threw a spear at Ingimundur, fatally wounding him. This particular conflict was ended when several months later both Hrolleifur and his mother were killed by Ingimundur’s sons.

The South Africa Abalone Conflict (Poachers Defying Authority). Abalone is a highly priced sea snail found in inshore areas in the temperate zones of the world. Commercial harvesting for abalone along the southern and eastern shores of South Africa began in 1949. By the mid-1960s, about 2,800 tons of abalone were being harvested annually. In a bid to stem overexploitation and protect the resource, quota restrictions were introduced in 1970. The first annual quota (or Total Allowable Catch) was set at 700 metric tons and, subsequently, reduced incrementally over the following two-and-a-half decades. By 1995, the annual quota was down to 615 tons (Steinberg, 2005; Tarr, 2000).

During South Africa’s transition to democracy, poaching began to escalate.12 By the late 1990s it had become a highly organized, multimillion-dollar illicit industry, controlled by street gangs on the shoreline and by transnational criminal enterprises on the trade routes to East Asia (Hauck & Sveijd, 1999). Despite increasing investments in shoreline patrolling and enforcement, the organized poaching activity proved both better organized and better armed. Consequently, it basically overwhelmed the enforcement, with the result that the entire fishery became dominated by the illegal activity. By 2002, more abalone was being confiscated by the enforcement authorities per year than was harvested by the commercial fishery (Steinberg, 2005). The illegal abalone poaching and export activity appears to have has continued ever since with various gangs fighting for a share in the illegal abalone trade (Hyman, 2020).

The Native Fishers in Puget Sound (Traditional Rights Asserted). In 1855, the U.S. government signed various treaties with Native tribes in order to persuade them to move onto reservations. Under one of these treaties, the Point No Point Treaty, tribes in the area around Puget Sound relinquished most of their land but retained rights to their traditional fishing areas in the Puget Sound (Gates, 1955).

During the latter half of the 20th century, when fishing expanded and various fisheries management measures were applied, these treaty rights became increasingly ignored by the authorities. On the basis of the Point No Point Treaty various Native tribe members flouted management prohibitions and went fishing, resulting in their arrests and fines. Seeking legal recourse, courts in the State of Washington declined to uphold the Natives’ treaty rights (Champagne, 2001).

Refusing to accept this, some Native groups organized illegal encampments, so-called fish-ins, along the shore, from which they went fishing. In 1963, the first fish-in was held at Frank's Landing, so named after a Native American, Willy Frank Sr., who had earlier in the century established himself and his family there to assert Native rights. Despite numerous arrests and convictions, fishermen would return to their fishing ground time and again, allowing themselves to be re-arrested for asserting their treaty rights (Tizon, 1999). The fish-ins spread throughout Washington and Oregon (Champagne, 2001).

Not all of the actions were nonviolent. In September 1970, Puyallup fishermen on boats, armed with rifles, challenged police and fired warning shots when officials approached their nets. One protester threw a fire bomb onto a bridge to slow the game officials’ advance, but police eventually raided the boats and camps and forcefully broke up the demonstrators with tear gas and clubs (Tizon, 1999).

Finally, the U.S. federal government intervened, suing the State of Washington for failure to uphold its treaty agreement. In 1974, in the case of United States v. Washington, U.S. District Court judge George Hugo Boldt stated that treaty right fishermen must be allowed to take up to 50% of all potential fishing harvests, and required that they have an equal voice in the management of the fishery (Champagne, 2001). Although it took a few years for the violence to die down, the so-called Boldt decision, reaffirmed by the U.S. Supreme Court in 1979, ultimately put an end to the violence, though legal disputes continued for several years (Champagne, 2001).

Recreational Versus Commercial Fishing

Commercial Versus Recreational Fishing for Atlantic Salmon (The More Valuable Use Prevailing). Atlantic salmon is a highly valued fish for recreational fishing. This is an anadromous species spawning in numerous rivers along the North Atlantic coastline in the United States, Canada, Iceland, Norway, Sweden, Scotland, and England but gaining most of its weight by feeding in the ocean.

From 1960 to 2000, this species came under greatly increased fishing pressure in the ocean, much of which was from nations without significant salmon rivers (Greenland and the Faroe Islands). This ocean fishing led to a substantial decline in salmon stock sizes and, consequently, a precipitous fall in salmon runs to many rivers, much to the chagrin of recreational fishers and their organizations. The problem was made more complicated by the international nature of the fishery on the high seas and the fact that some of the commercial fishing enterprises came from nations that did not even have significant salmon rivers (Mills, 2003).

On the other hand, the conflict was a positive sum one because the value of salmon for recreational fishing was much greater than in the commercial fishery. In fact, this proved to be the key to the solution. Recreational fishers established associations, the ASF (Atlantic Salmon Federation) and the NASF (North Atlantic Salmon Fund), which collected sufficient funds mainly from recreational salmon fishers and conservation agencies to sufficiently compensate the commercial fleets for refraining from ocean fishing for salmon. The problem of free riders was solved by the national authorities involved (essentially all the nations bordering the North Atlantic agreed to enforce this agreement against their own nationals).13

Mining and Fisheries Conflicts

Diamond and Phosphate Mining off Namibia. Aquatic mining has occurred for many years. Offshore oil extraction is most prominent, but there are many other types of aquatic mining, with most commercial ventures focusing on aggregates, diamonds, tin, magnesium, salt, sulfur, gold, and heavy minerals. Non-oil mining activities have so far generally been confined to the relatively shallow nearshore waters, but the deep-water mining technology is improving, and mining in deeper water looks set to proceed, with phosphate, sulfide deposits, manganese nodules, and cobalt-rich crusts regarded as potential future prospects (Baker et al., 2017).

Diamond deposits exist in the ocean along the coastal borders of Namibia. Since around 2000 several large dredger vessels have been operating in Namibian offshore waters, sucking up large quantities of diamonds. According to De Beers annual reports (De Beers, 2007, 2012) over 1 million carats of diamonds have been extracted from these waters annually (De Beers, 2007, 2012), shifting huge volumes of seabed sediments, sand gravel, and rocks in the process. Pulfrich et al. (2003) and Currie et al. (2008) have identified a number of environmental concerns associated with this diamond mining process. These include destruction of kelp beds, which provide important habitat for juvenile rock lobster, and the destruction of healthy reefs during the removal of diamond containing gravel.

Since the beginning of this ocean mining activity, the lobster fishery off Namibia has been much reduced. As a result, the lobster fishers firmly and actively oppose it. However, compared to the mining company, they have little power. Perhaps for this reason, open conflicts have not been reported. It is interesting, however, that a much larger phosphate mining proposal off the Namibian coast, which is likely to have a bigger impact on the Namibian fisheries, was initially put on hold by the government. Reportedly, the opposition of the Namibian Ministry of Fisheries proved pivotal in this decision (Benkenstein, 2014). In 2017, however, the Namibian government approved the project. This has led to protests and demonstrations by fishing workers (Hartman, 2019).

Fish Farming Versus Recreational Fishing

In recent decades there has been a tremendous expansion in salmon farming in the North Atlantic. The farmed salmon production has increased from virtually nothing in the 1970s to over 1.7 million metric tons in 2019 (Ices, 2020). Most of this salmon farming takes place in sea-cages in sheltered inlets or fjords close to shore.

This fish farming may affect fisheries in various ways. First, it occupies an ocean area that subsequently cannot be used for fishing. Second, it emits polluting substances that can affect ocean habitat and biota. Third, it is a source of parasites and diseases that may infect other fish, especially wild salmon. Fourth, escaped salmon from the cages may enter the salmon rivers, competing with and genetically polluting wild salmon stocks (Asche & Tveteras, 2006).

These potential impacts of salmon mariculture have generated a great deal of opposition from those who want to protect recreational fishing for wild salmon in rivers (sports fishing) and nature conservation agencies (see, e.g., Dickie, 2019; Plans to Expand Iceland’s Fish Farms Risk Decimating Wild Salmon Populations, 2019, see also, e.g., web pages of the ASF, Greenpeace, and others). Until now, this opposition has mainly been conducted via public discourse in the media and political lobbyism has not, apparently, led to physical clashes. However, it is clear that it has managed to significantly slow down the expansion of salmon mariculture around the North Atlantic.

Resolution of Fisheries Conflicts

As discussed in the section “Conflict Resolution,” conflicts can be ended (or at least alleviated) in essentially two ways; the imposition of a resolution and by the parties reaching an agreement.14

The imposition of a resolution must be carried out by some authority sufficiently recognized by the conflicting parties. This authority may be parents (in the case of conflicts between siblings), it may be a government official, for example, a police officer (stopping a street fight), it may be a judge (adjudicating a legal dispute), and so on. Imposed conflict resolution relies on customary authority and/or the power of enforcement. It is important to realize that in the case of an imposed conflict resolution, a degree of agreement by the parties involved is often necessary for the solution to hold.

If the imposition of a resolution is not available, conflict resolution requires the parties to come to an agreement. This is the case in many fisheries conflicts, which are frequently characterized by lack of authority such as those between nations outside their EEZs, or fishers harvesting from a common stock of fish.

It is important to recognize that to be viable, agreements must benefit all parties to the conflict in the sense that their benefits from the agreement must be higher than under any alternative arrangement. This limits the set of possible agreements to what game theorists refers to as the core of the bargaining game (Telser, 1994). Normally, the higher the cost of conflicts (including the loss from non-agreement), the larger the core of the game will be. It follows that in fisheries games (conflicts) the core of the game can be very large. The concept of the core can be illustrated with the help of the simple diagram in Figure 3.15

Figure 3 depicts benefits-sharing space. The benefits received by party A are measured along the vertical axis and those of party B along the horizontal axis. Therefore, any coordinate in the space corresponds to a certain amount of benefits to the two parties, A and B. Limited fish stocks impose an upper bound on total benefits. The attainable benefits are indicated by the shaded area in Figure 3. The maximum attainable benefits are indicated by the concave curve.16

Figure 3. The core of a bargaining game.

Now, assume that acting on their own, party A can obtain benefits amounting to Amin while party B can obtain Bmin. These benefits are less that the maximum attainable ones primarily because of reduced productivity of the fish stocks due to excessive fishing if the parties do not cooperate, but also because of the cost of engaging in conflict. If the parties are not cooperating, this may be regarded as a situation of conflict. Indeed, since the assumption is that the parties are extracting from a common limited resource (i.e., a fish stock) conflicts are virtually inevitable. The only question is how intense they are.

If, on the other hand, the parties cooperate, that is, resolve their conflict, they can obtain benefits up to the maximum attainable ones. For an agreement to be possible both parties must benefit more than they would acting on their own. This defines the set of agreement possibilities or the core of the game indicated graphically in Figure 3. While an agreement can take place anywhere within the core, optimal agreements must occur on the upper boundary.

Obstacles to Reaching an Agreement

As indicated in Figure 4 and supported by empirical measurements (World Bank, 2017), the benefits of a resolution (agreement) in fisheries conflicts can be very large compared to what the parties can secure on their own. Nevertheless, many fisheries conflicts persist for a long time, even centuries, with corresponding loss of benefits to the parties involved. This suggests that there may be significant obstacles to reaching an agreement in fisheries conflicts. Some of these obstacles will now be briefly reviewed.

1.

Different objectives by parties

As explained in the section “Types of Fisheries Conflicts” and illustrated in Figure 2, parties to fisheries conflicts do not only want to increase their share of the total benefits, they are also likely to hold widely different views on how to maximize these benefits. This holds both for different groups of aquatic resource users and individual members within each group. It follows that the problem is not merely to get the parties to agree to a certain sharing, but also getting them to agree on the overall stock and harvest combination.

2.

Difficulty in compensating parties

Another obstacle related to the previous one is the method for sharing the benefits generated by an agreement. This is a problem when one or more party gets insufficient benefit from the particular use of the resources that is agreed on. It happens, for instance, when the total benefit maximization requires one of the parties to cease fishing or the party gets most of his benefits not from fishing but from fisheries employment or aquatic tourism. How can these parties be compensated for their contribution to the agreement? This is the problem of side payments (Munro, 2003). Obviously, in these and many other cases, it is most expedient to compensate these and other parties to the dispute by a monetary transfer. Unfortunately, for instance in the case of international conflicts, this type of compensation is often unacceptable. Therefore, this poses an obstacle to the resolution of fisheries conflicts.

3.

Free riding

In fisheries where a common natural resource, the fish stock, is being utilized, there is a great opportunity for free riding. Individual fishers will benefit from curtailed fishing by others even if they do not reduce their own fishing. This, obviously, makes it much more difficult to attain an agreement. Even when it is attained, it tends to be undermined by the free riding. In the case of conflicts between fisheries and aquatic conservation, the free riding problem is even more acute. Conservation of fish stocks and other aquatic resources has many of the attributes of public goods (Samuelson, 1954), that is, the conservation benefits cannot be restricted to a subset of conservationists. It benefits all conservationists wherever they are in the world. This clearly hugely increases the free rider problem and gets in the way of conflict resolution.

4.

Altered conditions

To be viable, an agreement must be such that at each point of time all the parties feel that they are benefiting more than they could on their own or under some other arrangement. Whether this is the case, however, depends on the conditions of the game. These conditions, such as the geographical location of fish concentrations, fisheries technology, input and output prices, and the alternatives open to the parties, generally evolve over time. This implies that a previously satisfactory agreement may later become unsatisfactory and untenable. Moreover, since rational agents, of course, recognize this, the possibility of altered conditions makes it more difficult to reach an agreement at the outset.

5.

Game playing

Even when there are relatively few players and the opportunity for free riding is relatively small, as, for instance, in the case of international fisheries conflicts, it has often proved difficult to reach an agreement. One reason for this may be game playing, that is, one or more parties holding out to get more benefits out of the ultimate agreement. Another reason is that the parties are concerned about their reputation, which may affect the outcome of other conflicts to which they are parties.

6.

Other considerations

Fisheries conflict do not occur in isolation. Generally, the parties to fisheries conflicts are engaged in other conflicts taking place at the same time. It stands to reason that the outcomes of these other conflicts are not independent of what happens in the fisheries conflict. This is particularly obvious in the case of international fishery conflicts, where governments often act with one eye on other interests and conflicts. However, similar considerations may apply to any party to a fisheries conflict.

7.

The principal-agent problem

Often negotiations to end fisheries conflicts are or have to be conducted by representatives acting on behalf of their members. These negotiators by necessity have their own personal objectives and cannot be totally objective. Generally, they would like to “look good” in the eyes of their constituency. Often, they are under pressure from their members (constituency) to make what the latter consider a good deal. Fundamentally, this is the problem of insufficient information seeping down to rank and file members, but it is also a problem of politics with certain parties trying to enhance their power with the group. The problem is also linked to the well-known principal-agent problem (Grossman & Hart, 1983), where the agent (the negotiator) does not necessarily act as the principal (the constituency) wants.

8.

The cost of negotiation

These obstacles and others make it more difficult to reach an agreement. That is equivalent to increasing the cost of reaching an agreement. To embark on a project to resolve a fisheries conflict, or for that matter any conflict, is an investment with an uncertain outcome. The risk of failure translates into an added cost. Given the obstacles, it is by no means obvious that the expected value of this investment is positive. Therefore, apparently in many cases, the investment is not made.

Property Rights as a Means to Resolve Fisheries Conflicts

It is well established that if valuable resources are subject to sufficiently strong property rights conflicts over their use are greatly diminished and the use of the resources are reasonably close to being Pareto efficient (optimal) (Arnason, 2007; Scott, 2008). The social institution of property rights has worked very well in land-based resource use. It doesn’t require much contemplation to realize that property rights are the cornerstone of modern-day economic affluence.17

In the ocean, however, and most other water bodies, the system of property rights is much less developed. This applies not the least to the living aquatic resources such as fish stocks and other aquatic biota. Therefore, in the absence of property rights, these resources, if at all valuable, give rise to simmering conflicts with occasional flare-ups and generally very costly misuse.

It stands to reason that if a system of property rights in aquatic resources, similar to that for terrestrial resources, were established, fisheries conflicts and other aquatic conflicts would be much reduced and, at the same time, efficiency in the use of aquatic resources would be increased. There are two obstacles to this solution, however. First the property rights technology for aquatic resources is much less developed than for land resources. For instance, there is, as yet, no inexpensive way to identify individual fish as belonging to an owner or even to keep wild fish within a given enclosed area. Second, it should not be forgotten that property rights are a social institution. To establish them in particular resources requires sufficient social support. In fact, as human history informs us, the extension of the system of property rights to new resources been generally marked by conflicts, clashes, fights, and wars. While property rights may reduce conflicts over resource use, attempts to establish these property rights create their own conflicts.

In spite of this, the past several centuries have witnessed a creeping expansion of property rights in ocean and aquatic resources. The most noticeable of these developments have been (a) the enlargement of exclusive national economic zones (EEZs) and (b) the establishment of individual harvesting rights, the so-called individual and individual transferable quotas (IQs and ITQs). The former, the enlargement of EEZs, is a process that has been going on for centuries. The IQ/ITQs are a much more recent phenomenon emerging in the 1970s.18 However, since this time, the application of ITQs in ocean fisheries has expanded very fast. According to a recent count, over 25% of the global ocean catch was taken under ITQ or ITQ-like systems (Arnason, 2013). It should be noted that an extension of the national EEZ is often a prerequisite for the introduction of ITQs.19

EEZs may be seen as national property rights. Provided they are respected, the establishment of EEZs virtually eliminates international conflicts over the fisheries and other aquatic resources within their confines. EEZs fail, however, to eliminate conflict over fish stocks that straddle the EEZ boundary or periodically migrate outside the EEZ. Such transboundary or migratory fish stocks remain a source of conflicts between fishing nations. According to established law of the sea, specifically the UN Fish Stocks Agreement (Bjørndal & Munro, 2003; United Nations, 1995), in such cases the nations fishing from the stocks should form a RFMO (Regional Fisheries Management Organization) to coordinate the fishing activity. Several such RFMOs have been established around the world, managing over 150 species (Cullis-Suzuki & Pauly, 2010). While these RFMOs seem to have reduced or at least defused international fisheries conflicts, they have apparently proven quite ineffective in efficiently managing the fish stocks within their purview (Cullis-Suzuki & Pauly, 2010; Salenius & Arnason, 2020).

Properly designed IQs and ITQs provide the holder with a right to a certain share of the total allowable catch (TAC) every fishing season (usually a year). This largely removes the competition between fishers for catch and, therefore, a good part of the resulting conflicts. Moreover, it provides each ITQ holder with an incentive to move the fish stocks to their most productive level (because this maximizes the value of his ITQ). Furthermore, because of ITQ tradability, ITQ systems tend to bring about the most efficient number and configuration of fishers in the fishery. The less efficient fishers tend to trade their quota rights to the more efficient ones, thus receiving a share in their greater efficiency in the form of a monetary payment. As a result, ITQs promote efficiency in fishing. Note that this applies to all types of fishers: commercial, subsistence, and recreational ones, as well as their subgroups, such as high-technology and low-technology fishers, large-scale and small-scale ones, and so on. In summary, for all types of fishers, ITQs may be said to resolve a substantial part of fisheries conflicts in an efficient way.

It is important to realize, however, that ITQs are only harvesting rights, that is, property rights in harvesting. As a result, they do not resolve fisheries conflicts that do not directly involve harvesting, such as competition for landing spots, ocean space to access high fish densities, and so on. This is because these conflicts are about other resources, that is, landings facilities in the first case and ocean space in the second, while the ITQs are merely property rights in harvest quantity. It is another matter that these types of fisheries conflicts usually become less heated under an ITQ regime because, typically, there will be less fishing activity and fewer fishing boats.

It should also be noted that the establishment of ITQs, while reducing conflicts in fisheries, may be a source of a different kind of conflict. This is because the allocation of property rights to individuals or groups necessarily excludes non-receivers. Non-receivers naturally contest the allocation, sometimes bitterly. History abounds with such examples. In fisheries in which ITQs and other individual property rights have been established such disputes are very common. The same applies to the extension of national EEZs in the past, although the associated international disputes have died down somewhat recently. It follows, that the benefits of ITQs and similar individual property rights as conflict-resolving mechanisms in fisheries must be set against the costs of increased conflicts about the property rights system itself.

What is not so obvious is that ITQs, despite their limitations as property rights, provide a certain basis for resolving conflicts between fishers and non-fishing uses of aquatic resources. Non-fishing uses of aquatic resources may be divided into uses that are concerned with the state of the fish stocks and, therefore, indirectly harvesting, and non-fishing uses that are uninterested in fishing and fish stocks but may affect both. Examples of the former are aquatic conservation and certain types of aquatic recreation and tourism such as reef diving. Examples of the latter are aquatic mining, aquatic transportation, and aquatic dumping of refuse.

Consider first non-fishing uses of fish stocks, such as aquatic conservation and tourism. Assume, as is empirically reasonable, that these activities would like to see larger fish stocks than the fishers would. This is a source of conflict with the fishers. Within the ITQ system, however, aquatic conservation and tourism are able to increase the size of commercial stocks, and basically move the ecosystem closer to a pristine state, by purchasing ITQs and leaving them unused. Thus, the ITQ institution provides the aquatic conservationists and tourists with a way to achieve their preferred fish stocks by simply trading ITQs with the fishers instead of fighting them. As they do the trading they continually compare their benefits of purchase to their valuation of the monetary outlays, ending purchases when the two values are equal. The same, of course, applies to the fishers; they do not have to fight with these other users of aquatic resources. They can simply trade with them. These ITQ trades will find an equilibrium where the shadow value of additional catch to fishers equals the shadow value of addition conservation to the conservationists. Needless to say, this ITQ trading will increase the total value of resource use, benefit both parties, and allocate the scarce resources more efficiently between the parties (Arnason, 2008, 2012).

It is important to recognize, however, that unlike in the case of fisheries, decentralized ITQ trades between fishers and conservationists (or aquatic tourists), while likely to significantly alleviate the conflicts between these groups, are very unlikely to bring about the optimal allocation of aquatic resource use between these groups. The fundamental reason is that these trades generate positive external effects for both groups. Consider the case of a conservationist purchasing one unit of quota from a fisher for retirement. Since this will, ceteris paribus, lead to a larger fish stock, all other conservationists and fishers will benefit from the trade. In other words, an ITQ trade from fishers to conservationists generates a positive external effect for both fishers and conservationists (as well as aquatic tourists and others preferring larger fish stocks). These extra benefits of the trade are naturally not taken into account by the fisher and the conservationist. As a result, the extent of such decentralized trades is less than would maximize total benefits (Arnason, 2012). It follows that if fishers hold the ITQs to start with, there will, from the social perspective, be too much fishing and too little conservation. Trades from conservationists to fishers will, on the other hand, generate negative external effects for both fishers and conservationists because this reduces the fish stocks. Therefore, decentralized trades of this kind will be larger than would be collectively optimal with the same result: there will be too much fishing and too little conservation.

It is possible to illustrate the essence of this analysis with the help of a simple supply and demand diagram. In Figure 4, the volume of harvest is measured along the horizontal axis and values along the vertical axis. Consider the trade of ITQs between one fisher and one conservationist. Assume that under the ITQ system the ITQ holding of the fisher is at Q.20 Let the marginal benefits of harvest to the fisher be indicated by the bold downward sloping curve. The curve may be interpreted as the fisher’s demand function for harvest. However, since fishing his quota (rather than not fishing it) reduces the fish stocks, the marginal benefits of this fishing to all the fishers jointly is less, indicated by the dashed downward sloping curve, which may be interpreted as the aggregate demand curve for harvest (out of the fisher’s Q).

Figure 4. Fishing versus conservation allocation.

The conservationist suffers costs from the fishing. The conservationist’s marginal cost is indicated by the bold upward sloping curve in the diagram. This may be interpreted as his supply curve of harvest. However, since there are other conservationists, the joint marginal cost curve is higher, indicated by the dashed upward sloping curve in the diagram.

From the figure, it can be seen that the trading equilibrium between the fisher and the conservationist is at harvest q° where their individual supply and demand curves intersect (and their evaluations of the value of additional harvest is equal). However, the optimal harvest occurs at much lower harvest, q*, where the joint supply and demand curves intersect.

So, under decentralized trades, the ITQ system will not result in the optimal allocation of resource use between fishers and conservationists. Note, however, that although decentralized ITQ trades fail to generate full efficiency, they definitely represent an improvement in resource allocation efficiency, as well as reducing conflicts, compared to not allowing conservationists to participate in the ITQ system at all.

The obvious solution to this problem is centralized trades. If, instead of trading individually, both groups, fishers and conservationists, acted jointly with regard to trades of quota shares, the external effects would be internalized and, in principle, optimal ITQ allocation would result. This of course means that the trading quantity and the quota price is a matter of bilateral negotiation between the two groups. However, the very substantial added benefits to be gained increase the likelihood of an agreement. Moreover, in this situation, where rights are well defined by virtue of the ITQ system, the so-called Coase-theorem (Coase, 1960) indicates that there is a high likelihood that the parties will agree on the harvesting solution that maximizes their joint benefits.

What about the other users of aquatic resources such as aquatic miners, transporters, and polluters that are not interested in fish stocks? It is clear that they would not buy ITQs to enhance fish stocks and would sell all their ITQs, if they had them. Thus, ITQ trading would not facilitate the optimal sharing of aquatic resources between them and fishers or alleviate conflicts between them. This outcome is because the ITQs, being merely harvesting rights, do not cover the aquatic resources these users want, namely minerals, ocean surface, and ocean space and currents. For this purpose, the ITQs property rights are simply too limited.

If, however, the ITQ right were extended to cover the right to a certain state and regenerative ability of the fish stocks and the aquatic environment, the situation would be changed.21 In that case, any aquatic use that reduces the productivity of valuable fish stocks would violate the ITQ rights and be subject to the appropriate compensation. This would, of course, curtail these other activities and move them toward the overall optimal level. Moreover, with these rights in hand, fishers acting jointly could negotiate with these other aquatic users a jointly optimal sharing of the resources along the lines discussed.

Conclusions

Fisheries conflicts have a very long history in human societies. They seem to be present wherever fishing takes place. Apparently, most of them are of relatively low intensity, but they sometimes flare up into armed confrontations and even the application of national navies. In addition to their direct costs, to the extent that these conflicts prevent the optimal use of renewable aquatic resources, they can be very costly indeed.

Fisheries conflicts are fundamentally caused by the shortage of fish resources relative to demand. However, similar scarcity of natural resources on land does not, at least not in recent history, generate the same degree of conflicts. The reason seems to be that most land-based resources have become subject to an extensive system of property rights, which has channeled the conflicts into a less harmful form. This suggests that a similar system of property rights in aquatic resources would reduce fisheries conflicts to the level seen for terrestrial resources.

The extensions of national exclusive economic zones (EEZs) constitute a step in this direction. Although far from enclosing all international ocean commons and fish stocks, these extensions have already significantly reduced international fisheries conflicts and mollified many of the remaining ones.

Another type of property rights in aquatic resources that has been expanding fast in recent decades are individual quotas (IQs) and individual transferable quotas (ITQs). These, however, are only harvesting rights and are, therefore, extremely limited as property rights in aquatic resources. Nevertheless, where they have been implemented, they have proven capable of both reducing fisheries conflicts and greatly enhancing the economic efficiency in fishing (Arnason, 2013). The main practical drawback is that individual quota systems, as other property rights, need considerable enforcement to be effective. Therefore, they are more suitable for advanced societies than those with weak administrative capacity. Nevertheless, since their beginnings in the 1970s, they have expanded very fast around the world and currently account for over a quarter of the global ocean catch (Arnason, 2013).

It has been demonstrated both theoretically and empirically (Arnason, 2009, 2013) that ITQs are capable of solving resource allocation conflicts between all major types of fishers, commercial ones, recreational ones, and subsistence ones, as well as those between subgroups such as large-scale and small-scale ones and inshore and offshore ones. The main reason is that the ITQ rights eliminate the need to fight with other fishers for catch, and by trading of these rights each fisher can share in the greater efficiency of the others. Thus, as an example, under the ITQ system, a poor subsistence fisher can indefinitely maintain his lifestyle by continuing to use his quota for subsistence fishing or can increase his wealth by trading his quota rights to a more efficient high-tech commercial fisher.

It should be noted, however, that how much any given fisher gains from the ITQ system depends very much on how much ITQ rights he initially receives. Therefore, to a certain extent, the previous fisheries conflicts may be transformed into conflicts about the initial allocation of ITQ rights.

ITQs are also quite promising for reducing conflicts between fishers and certain non-fishing uses of aquatic resources such as aquatic tourism, recreation, and conservation and even resolve them in the best possible way. The reason is that by trading ITQs rights all parties can move the fish stocks to their desired level.

ITQs are much less potent for resolving conflicts between fisheries and non-fishing uses of aquatic resources such as aquatic mining, pollution, and transportation. The fundamental reason is that these non-fishing uses have no (or very little) interest in the fish stocks and ITQ trades, and therefore, do nothing for them. ITQs, however, are not quite impotent for resolving these kinds of fisheries conflicts. First, the system of ITQs facilitates the identification and cohesion of ITQ holders. Therefore, they as a group are in a better position to negotiate with other users of aquatic resources along the lines identified by R. Coase (1960). Second, the ITQs provide the fishers with certain rights to a yield from the fish stocks that the other aquatic users may be deemed to infringe upon. To the extent that this holds, the ITQ holders are in a much stronger position to bargain with the other users. Nevertheless, this aspect of fisheries conflicts would be much more effectively handled if the ITQ rights were formally extended to include the fish stocks themselves as well as the surrounding aquatic ecosystem.

Further Reading

  • Arnason, R. (2000). Property rights as a means of economic organization. In R. Shotton (Ed.), Use of property rights in fisheries management (pp. 14–25). FAO Fisheries Technical Paper 404/1. Food and Agriculture Organization of the United Nations.
  • Arnason, R. (2012). Property rights in fisheries: How much can ITQs accomplish? Review of Environmental Economics and Policy, 6, 217–236.
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Notes

  • 1. They are J. Nash, J. Harsanyi, R. Selten, R. Aumann, T. Schelling, W. Vickrey, R. Myerson, L. Shapley, and J. Tirole.

  • 2. Most of these nine game theorists are first and foremost economists.

  • 3. This may be recognized as being a variant of a famous theory on population by the classical economist Malthus (1798).

  • 4. It would be negative if it were in excessive supply in the sense that the individual would prefer to have less of the resource.

  • 5. An excellent reference for property rights in general is Scott (2008).

  • 6. For instance, extinction of entire species as happened, for instance, to the dodo bird, the great auk, and perhaps some of the American Pleistocene megafauna (Smith, 1975).

  • 7. Conflicts undermine cooperation, leading to increased resource scarcity inducing further conflicts.

  • 8. It is straightforward to extend the illustration to cover other groups of non-fishers such as aquatic tourists and so on. Note, however, that the conflict with aquatic users that take no interest in fish stocks, such as aquatic miners and transporters, cannot be captured by this particular diagrammatic device.

  • 9. Pure conservationists would want no fishing whatsoever, unless they were concerned about some other aspects of the ecosystem.

  • 10. Provided, of course, that they could get benefits from fishing, which is essentially the definition of them being fishers.

  • 11. Note that since we are assuming equilibria, a given level of biomass implies a certain level of harvest.

  • 12. The first nonracially segregated election was in 1994.

  • 13. For further details consult the web pages of ASF and the NASF.

  • 14. Conflict can also fizzle out and disappear, but in that case, there is no conflict to resolve.

  • 15. This diagram is similar to the positive sum one in Figure 1.

  • 16. This curve might also reasonably be a straight line (weakly concave). The reason for the strictly concave shape drawn is the economic law of diminishing returns (Varian, 1984).

  • 17. Arnason (2000) explains that property rights are necessary for significant division of labor, accumulation of capital, and the operation of the market system, all three of which are crucial pillars for modern affluence.

  • 18. In 1976, the Netherlands and Iceland independently of each other installed the first ITQ systems in their flatfish and herring fisheries, respectively (Arnason, 2012).

  • 19. A sufficiently large EEZ to exclude foreigners from harvesting from the fish stock in question is often seen as necessary for the introduction of a national ITQ system.

  • 20. In this example we do not need to consider the fisher’s possible trades with of ITQs with other fishers.

  • 21. It is, of course, possible that courts would interpret current ITQ rights to encompass this.