FISHERY BULLETIN: VOL. 73, NO. 1 



geous trades between the two countries given 

 their initial positions which include their produc- 

 tive capacity and the rights to the fishery that 

 they have obtained by the right of capture. At this 

 point there will be an MEY to the fishery. The 

 proper amount offish will be harvested and at the 

 lowest cost possible. But since there is nothing 

 sacred about these initial positions, point D is not 

 inherently superior to any other point on the 

 curve. If the world order somehow alters their 

 initial positions, for instance, by saying that since 

 y is a poor country it should be able to expand 

 its effort and X should do the opposite, the same 

 types of trades will still be possible, and they will 

 lead to a point on the curve that is more advan- 

 tageous to country X than was point D. This point 

 would also be an MEY given the distribution of 

 productive capacity and of the wealth of the fish- 

 ery. The distribution of the rights to the fishery 

 is very important in determining the MEY of the 

 fishery. Let us consider some of the practical im- 

 plications of this discussion. First, before an inter- 

 national fishery can be optimally managed, the 

 wealth from it must be distributed. The exact 

 makeup of the distribution is not important, but 

 it is possible, in most cases, to find a distribution 

 whereby both countries are better off than at the 

 initial bargaining point. The rights to the fish- 

 ery should be transferable if the country owning 

 them is to receive the maximum possible benefit. 

 This way, it can sell the rights or hire effort from 

 other countries to utilize them if it does not have 

 a comparative advantage in producing effort. 

 Therefore, unless the upcoming Law of the Sea 

 Conference can agree to some sort of distribution 

 of the wealth of the fishery and make allowances 

 for possible trades in the makeup of the distribu- 

 tion bundle and also in fishing rights and effort, 

 there is little hope for economically rational 

 management of international fisheries. 



The results of this two country, one fishery 

 model can be expanded in a fairly straightforward 

 fashion to a situation where there are many coun- 

 tries that simultaneously exploit several different 

 fisheries. An international open-access equilib- 

 rium will occur when, in each country, the average 

 returns from fishing the various stocks are equal 

 to the average cost of providing effort. The dis- 

 tribution of the wealth from the fisheries will de- 

 pend on the ability of each of the countries to 

 produce the effort that is most efficient for a par- 

 ticular fishery. The more efficient producers will 

 capture a larger share of the fisheries. If perfect 



international trade in fish products is not possible, 

 then the distribution of the fishery by the "rule of 

 capture" wall also depend upon the tastes of the 

 countries. A country that has the potential to har- 

 vest a certain type offish very efficiently but has 

 little desire for the product and cannot use it in 

 international trade wa 11 not exploit that stock very 

 extensively. 



The usefulness of unilateral regulation in this 

 situation will probably be less than in the two 

 country case. Any reduction in effort will more 

 than likely be met by an increase from one of the 

 other countries. Therefore, while the country will 

 show an increase in the amount of other products 

 it can produce, it is entirely possible that the value 

 of its total production will fall due to the decrease 

 in catch. 



Proper international regulation must take into 

 account the effect that effort from one country will 

 have on the yields to other countries exploiting the 

 same stocks. With this consideration in mind, 

 each country can benefit from some program of 

 reallocation of the rights to the fish stocks from 

 that which exists under open access. To achieve 

 the maximum potential benefits, this program 

 should include the possibility of trade in effort, 

 fishing rights, and final products. The existence of 

 many countries wall of course make it much more 

 difficult to specify the set of redistributions that 

 would be beneficial to all concerned and even more 

 difficult to get the countries to agree to one combi- 

 nation within that set. A major problem with in- 

 ternational regulation is that allocational re- 

 quirements are just as important as economic 

 efficiency requirements. But given a mutually 

 agreed upon allocation (i.e. a certain allowable 

 level of effort in each country for all fisheries), 

 the efficiency requirements can be met. The prob- 

 lem is to get agreement on a distribution plan 

 with many different countries involved. 



SUMMARY AND CONCLUSIONS 



In the first section of the paper the general 

 equilibrium model was used to derive the familiar 

 result that in an open-access fishery too many 

 resources will be allocated to the production of 

 fishing effort. Using this model it is possible to 

 explicitly take into account the lost production of 

 other goods. In the second section the general 

 equilibrium model was expanded to include two 

 countries exploiting the same open-access fishery. 

 The amount of effort used in one country will af- 



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