Costs of fisheries management: the cases of Iceland, Norway and Newfoundland

This paper reports on the results of an investigation of management costs i n the fisheries of Iceland, Newfoundland and Norway and discusses them in a more general framework. Management costs are defined as costs necessary to overcome the problems associated with common property. The question of whe ther management costs should be paid by industry is discussed, as is the li kely effect of user pay on the efficiency with which management is provided . Since management has public goods characteristics, it is likely that ther e is an unavoidable role for government in providing these services. The qu estion of who pays for it is separate, and recovering costs from industry h as both efficiency and optimal taxation aspects. A greater involvement in m anagement by industry further raises the question of compatibility between the industry's interests and the public interest. Measured as percent of gr oss value of fish landings the management costs are by far highest in Newfo undland (15-25%), lowest in Iceland (about 3%), with Norway in the middle ( about 10%). Management costs thus appear to be substantial and quite variab le. This gives rise to three conclusions. First, when calculating optimal h arvesting and investment paths one must take the management costs of implem enting these paths explicitly into account. Second, what is the economic ef ficiency of management? Could the same level of benefits be produced at low er costs? Third, can fisheries management expenditures of the magnitude dis cussed be justified in the sense that the benefits exceed the costs? (C) 20 00 Elsevier Science Ltd. All rights reserved.