Transcript Eksterne relationer

Regulation as a policy contest:
The effect of changed environmental conditions on the
probability of conservation of a renewable resource
Urs Steiner Brandt
Presentation at the
Workshop on: Social & Natural Scientific Advice in
Marine Renewable Resource: Closing the Gab between
Politics & Theoretical Ideals in Fisheries Management
University of Southern Denmark, Esbjerg, June 2007
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Public choice theory to explain regulatory outcomes
Buchanan and Tullock (1975):
In order to present a positive theory of regulation … it is necessary
to resort to public-choice theory, since the interests of those who are
subjected to the control instrument must be taken into account.
This paper takes the political economy point of view (to its extreme)
that regulation is (totally) determined by a contest between relevant
interest groups.
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Structure of the model
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Fisheries management as a political contest
In this paper, the chosen fisheries management scheme is determined
by a contest between two opposing stakeholder groups: the fishermen
and the biologists.
The probability of a policy that results in overfishing or in
conservation is dependent on the relative benefits the two groups
receive if their preferred policy is the outcome of the contest.
This set-up makes it possible to predict how climate change induced
changes in the underlying bionomic model affects the probability of
overfishing.
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The objectives of the interest groups
• The fishermen:
The objective of the fishermen is maximize profit, while only
partially concerned about the future rent in the fishery.
• The biologists:
The biologist has the aim of reducing current fishing effort in
order to protect the fish resource.
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Objectives of biologists
Their agenda is to increase the stock size of the resource to an
“acceptable” level. (This could be motivated by safeguarding
the stock in case of unforeseen (stochastic) temporary shocks
that could force the stock below its minimum level with long
lasting adverse consequences.
An example: ICES
To prevent cod stocks in the North Sea, Irish Sea and west of
Scotland from going the same way (as the Canadian cod stocks
collapsed in the early 1990s), ICES has been calling for a complete
ban on cod fishing in these areas and for the development of
recovery plans to rebuild the stocks.
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Objectives of the biologists
The intertemporal utility for the biologists read:
u C  u1C ( S1  h1 )  u2C ( S2  h2 )
Max u C 
h1C  0
Biologists are maximizing utility by closing the harvest activity.
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Objectives of fishermen
The intertemporal utility for the biologists read:
max    1  d   2 
P  h1  c1 (h1 , S1 )  d ( P  h2  c2 (h2 , S2 ))
where
S2  k  g (h1 , S1 )
max 

h1  h1H
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Benefits to the contenders
There are only two possible outcomes in the political stage,
either high level of harvest, or zero harvest.
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The political contest model
Two main drivers of the model:
Higher relative contribution increases probability of winning
Higher relative gain from winning increases contribution
This is done by assuming the existence of a contest success
function that specifies the probability of approval of the proposed
policy corresponding to the rent-seeking effort of the interest
groups (Epstein and Nitzan, 2002, page 138).
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The political contest model
The benefit for the fishermen from winning
N H   (h1H )   (0)
The benefit for the biologists from winning
N C  u (0)  u (h1H )
NH
 H
N  NC
Probability of the fishermen winning the contest
pH*
Probability of the biologists winning the contest
C
N
p C*  H
N  NC
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First results
The probability of conservation is increasing in the relative gain to the
biologists and decreasing in the relative gain to the fishermen.
p C*
NC
 H
0
H
C 2
N
(N  N )
p C*
NH

0
C
H
C 2
N
(N  N )
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Introducing climate change
There are many ways how climate change related effects might
affect the fish resource:
• Affect the level of recruitment,
• Affect size and quality of the fish resource,
• Lead to emigration or immigration of species in specified geographic
areas,
• Increase the natural variability,
• Increase the scientific uncertainty of the resource.
This paper analysis the situation where future profits are expected to
be reduced for the same level of catches in the present period.
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How climate change affect the gain from winning
Remember that
S2  k  g (h1 , S1 )
Useful results:
dh1
0
dk
d 1
0
dk
h1C
0
k
In order to evaluate the effect of changed environmental conditions
on the output of the contest model, it is necessary to calculate how
this affects the gain from winning the contest.
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How climate change affect the gain from winning
Biologists:
 CC N tC  N tC (k CC )  N tC (1)
Measures how the gain from winning the contest for the biologists
is affected by climate change in period t, t = 1,2.
Harvests are larger in period one due to changed
CC N1C  0 climatic conditions, while the baseline is identical;
therefore the net gain in utility from winning is
decreased for the biologists.
 CC N 2C  0 The utility from losing is reduced, but the utility from
winning is also reduced.
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How climate change affect the gain from winning
Fishermen:
 CC N tH  N tH (k CC )  N tH (1)
Measures how the gain from winning the contest for the fishermen
is affected by climate change in period t, t = 1,2.
Harvests are larger in period one under the changed
 N  0 climatic conditions, while the biologists' proposal is
unchanged and the net profit for the harvesters from
winning the contest increases in the first period.
CC
H
1
 CC N 2C  0 The profit from losing is reduced, while the profit from
winning is also reduced.
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Effect of CC on the probability of conservation
Given these ambiguous result, can we determine the effect
of changes in climate on the probability of conservation?
h1 C
u
N 
|h hH 
N
C*
1 1
h1
k
p

0
H
C 2
k
(N  N )
H
The result is clear: negative climate effects reduce the
probability of conservation.
Intuition ???
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Extensions
• Making policy proposals endogenous
• Introducing a probability that stock will collapse
Endogenous: Considering how choice of policy proposal affects
the choice of contender: When fishermen reduce harvest in period
1 implies less aggressive biologists.
Collapsing stock: If higher catch implies higher probability of
collapse, then it cannot be excluded that: dh1 / dk  0 .
Now both group invest less in the contest, when k is smaller, and
the result on conservation is uncertain.
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Conclusion
By treating the determination of the fisheries management as a contest
between interest groups with opposing objectives, it is possible to
endogenously determine the probability of conservation as determined
by the interest groups’ relative gain of winning the contest.
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