The role of social and technical excludability for the success of impure public good and common pool agreements

• Published in: Resource and energy economics Vol. 59; p. 101122
• Main Authors: Finus, Michael, Schneider, Raoul, Pintassilgo, Pedro
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.02.2020
• Subjects: Benefit-cost duality of public goods and common pool resources; Free-riding; Property rights; Pure and impure public goods and common pool resources; Regional fisheries management organizations; Shared fish stocks; Technical and socially constructed non-excludability; Q22; Shared fish stocks; F53; H87; Property rights; Pure and impure public goods and common pool resources; Benefit-cost duality of public goods and common pool resources; Technical and socially constructed non-excludability; Free-riding; Regional fisheries management organizations; C72
• ISSN: 0928-7655; 1873-0221
• DOI: 10.1016/j.reseneeco.2019.101122

•Fully integrated model, density-dependent diffusion process model, sink-source model.•Incentive structure of forming impure public good and common pool agreements.•Degree of socially constructed excludability and technical excludability.•Benefit-cost duality between public goods and common pool resources.•High seas and exclusive economic zones linked through the migration of fish stocks. We argue that international fisheries are a prime example to study the incentive structure of forming impure public good and common pool agreements. We consider a fully integrated multiple zone model, in which zones are linked through density-dependent migration. The incentive to accede to Regional Fishery Management Organizations (RFMOs) is related to multiple characteristics. Firstly, the relative patch sizes of the high seas, which is the internationally (publicly) accessible domain, compared to exclusive economic zones, which are state-owned (privately owned). This can be related to the degree of socially constructed excludability. Secondly, the intensity of fish migration between various zones, which can be related to the degree of technical excludability. Thirdly, the growth rate of the resource, which can be interpreted as the degree of rivalry, with a low (high) degree of rivalry approximating public good (common pool) features. We show that, generally, excludability reduces free-riding incentives but also the need for cooperation, a variant of the “paradox of cooperation”. Moreover, we show that the benefit-cost duality between public goods and common pool resources generally holds except for some extreme parameter values for which a low degree of rivalry fosters the success of cooperation. Finally, through a variation of the diffusion matrix, we can also analyze a closed as well as a sink-source system.