Abstract
European fisheries activities are subject to a hierarchy of regulatory authorities. This raises questions regarding the implications of strategic interaction between different authority levels concerning the regulation of these activities. We apply a bio-economic objective function where fishers and regulators have environmental, economic and social preferences, and where fishers are subject to the aggregate of the regulations set by the various authorities. We analyse one situation where EU authorities set their regulation first, followed by national authorities’ regulation, and one situation where the two regulators set their regulations simultaneously. Using data from a survey on preferences among fisheries stakeholders combined with data from the UK nephrops fisheries, this study shows that a hierarchy of regulators with similar preferences will yield higher unit regulations, i.e. higher taxes or higher subsidies than a situation with one regulating authority. When regulators have unequal preferences we may get a situation where one regulator induces a tax on effort, whereas the other offers a subsidy. In this situation the aggregate unit regulation becomes uncertain.
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Notes
Clearly, in an uncertain world better protection could be obtained at higher stock levels than MSY. Whereas this technically can be implemented in our model, it makes the model analytically less tractable without adding much to the results. It would increase the optimal unit regulation (when a tax) somewhat and thus reduce the optimal effort compared to the model we use in this paper. In another paper, Aanesen and Armstrong (2014a), we apply an objective function where utility does not decrease in the stock size beyond the MSY stock level.
The expressions for optimal effort for each of the actors are given in the “Appendix 6.1”.
The explicit expressions for the optimal regulations with two regulators setting their regulation simultaneously are given in the “Appendix 6.2”.
This was done in the EU-funded FP7 project “Making the European Fisheries Ecosystem Plan Operationable”.
The three pillars were expanded upon with regards to descriptors and indicators, but this is not necessary for the current analysis.
This is the case with the following preference structure for the fishers; \(\beta _1^F=0.3,\beta _2^F=0.1,\beta _3^F =0.6\).
With two regulators, one set of fishers’ preferences which give this preferred effort level is \(\beta _1^F=0.36,\beta _2^F=0.21,\beta _3^F=0.43\).
Note that this exceeds the MSY level and thus does not represent a steady state solution.
This is the case with the following preference structure for the EU authorities; \(\beta _1^{EU}=0.29,\beta _2^{EU}=0.04,\beta _3^{EU}=0.67\).
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Acknowledgments
The research on which this paper is based was conducted as part of the EC-FP7 funded project Making the European Fisheries Ecosystem Plan Operational (MEFEPO) (Project # 212881). We wish to thank all MEFEPO partner participants, and specifically Jesper Raakjaer, Innovative Fisheries Management, Aalborg University, Denmark, for constructive discussions and input. We also wish to thank two anonymous reviewers for insightful comments which have contributed to make the paper more relevant. All viewpoints and eventual errors are the responsibility of the authors.
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Appendix
Appendix
1.1 Regulators Moving Sequentially
Taking the derivative of \(\hbox {U}^{EU}\) in (10) w.r.t. E yields the optimal effort for the EU authorities, which is
The optimal effort level for the national authorities is found by maximising \(U^{N}\) w.r.t. E, and given (11), and is given by
And the optimal effort for the fishers, given two regulators is
Equalising (22) and (24) yields (13) and equalising (23) and (24) yields (14).
The explicit expressions for the optimal regulations are
1.2 Regulators Moving Simultaneously
The national authorities’ optimisation problem in the case of two regulators is now
were we have kept the same share of the regulation revenue to national authorities, \(\uprho \), as in the previous examples.
Taking the derivative of \(\hbox {U}^{N}\) w.r.t. E yields the optimal effort for the national authorities, which is
The optimal effort level for the EU authorities is given by
And the optimal effort for the fishers, given two regulators is
The explicit expressions for the optimal regulations when there are two regulators are:
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Aanesen, M., Armstrong, C.W. The Political Game of European Fisheries Management. Environ Resource Econ 63, 745–763 (2016). https://doi.org/10.1007/s10640-015-9878-0
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DOI: https://doi.org/10.1007/s10640-015-9878-0
Keywords
- EU fisheries management
- Management hierarchy
- Multiple principals
- Optimal regulations
- Strategic interactions