The role of economics in global management of whales: re-forming or re-founding IWC?

The global management of whale species, identified as an economic mixed goo d, is addressed by means of economic theory of bargaining and institution m aking. I will analyse (i) why it is important to take into account explicit ly both (consumptive) use and non-use values within international conventio ns on global mixed goods; (ii) the role and nature of institutions dealing with global issues; (iii) the role of bargaining between conflicting intere sts as a focal feature of the institution-making process; and, (iv) the rol e of economic thinking in international conventions. Go-operative and non c o-operative solutions are discussed, and instruments aimed at achieving co- operative bargaining, analysed. The study has both positive and normative i mplications, with insights on social welfare enhancing institutional reform s. Although the study is broad yet special focus is given to the Internatio nal Whaling Commission (IWC). This paper concludes that we should make econ omic theory operational within the realm of global institutions. On the bas is of the bargaining model, the conclusion is that IWC should necessarily b e re-founded or at least re-formed, changing the convention from 'whaling' to a 'whale'. It is suggested that the possibility of introducing compensat ory side payments into the bargaining arena in order to increase social wel fare and enforceability with respect to a 'ban' scenario be investigated. E thical implications of monetary compensations are considered in parallel wi th economic efficiency. The limits and potentialities of economics and econ omic instruments are also tested globally with respect to the whale and oth er environmental issues. (C) 2001 Elsevier Science B.V. All rights reserved .