Strategies for Enhancing Rent Capture in ITQ Fisheries
An ITQ System that relies on a single price to allocate harvest rights will not be fully efficient unless the stock in question is uniform in terms of its economic value. Variations in the location or density of portions of a stock can give rise to corresponding variations in value, leading harvesters to compete for the best portions of the stock. The size of the waste that can arise from this competition is governed in part by the degree of heterogeneity—greater heterogeneity leads to greater losses. Similar losses can arise from inefficient search in cases where rights are not spatially delineated. We argue that these potential losses can be eliminated either by fully delineating ITQ harvest rights or by coordinating the fishing effort expended by quota holders. Evidence on practices adopted by harvesters operating under ITQ and other forms of regulation indicate that the issues we raise have practical relevance.