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This article reviews the authors’ earlier attempts to incorporate the theories of capital and investment into fisheries economics and argues that such dynamic analysis is now of immediate policy relevance. It also discusses some limitations to the earlier analysis and means of addressing them. It then goes on to point to two areas of potential future research, with the first of these being an expansion of work initiated by the Organisation for Economic Co-operation and Development (OECD) and others on the economics of the required massive investment in hitherto overexploited capture fishery resources, giving particular emphasis to the consequences of non-malleable human capital. The second concerns intra-EEZ management of fishery resources and the growing need for greater application of game theory to the management of such resources.

This review focuses on four key scholars who were instrumental in helping to launch the field of natural resource economics: Siegfried von Ciriacy-Wantrup, James Crutchfield, John Krutilla, and Anthony Scott. Their contributions include recognizing natural resources as renewable capital, thereby altering the important dynamic dimensions of an efficient allocation. The introduction of irreversibility was a key element for decisions involving unique natural assets. Introducing uncertainty into these choices required consideration of appropriate public attitudes toward risk that led to the concept of a safe minimum standard. Identifying and emphasizing the salience of nonmarket values, particularly existence and bequest benefits, gave rise to the contingent valuation and the development of stated preference methods as a cottage industry. Setting forth and evaluating alternative management policies for open access resources in a dynamic context were other achievements. The backgrounds of these four scholars shaped their professional orientation; their contributions, in turn, have shaped the evolutionary path of resource economics research.

In recent years, attention has been devoted to fishery management problems that arise because capital embodied in fishing fleets is often nonmalleable, having few if any alternative uses. This problem of irreversible investment was analyzed by Clark et al. (1979), using a deterministic model. In reality, however, most investment decisions must be made within an uncertain environment. This paper describes recent efforts to account for uncertainty in analyzing the problem of optimal fishery investment, where the uncertainty is caused by stochastic variability in the resource stock from year to year.

This document provides the findings and recommendations from a desk study carried out in support of the Caribbean Billfish Project. It includes an analysis of the motivating factors for rights based approaches in order to address the common pool fishery problems which dissipate rents. Human action depends on the fisheries management approaches followed. The study recognizes that it is a challenge to apply rights based approaches in the developing world. The author states that the answer is to secure rights to the fishery to end the race to fish and to put proper incentives in place to increase wealth and sustainability. The document also describes the characteristics of strong rights and several rights based approaches in commercial and recreational fisheries for billfish.. Fishery management can be characterized by top-down management controls. These controls are politicized during their creation with user groups lobbying for their own interests. As a result regulations are typically less stringent than they should be from a conservation perspective. Additionally, top down controls induce a race to fish. That is, fishermen act in their own best interest to catch as much of a limited stock as possible while competing against their fellow fishermen. This induces all sorts of strategic behavior that runs contrary to the best intended top down controls. Management goals can be met easier at a lower cost and generate higher value for the resource owners when fisher incentives are taken into account. Regulators can attempt to control mortality through top down command and control regulations or through actions that take fisher incentives into account. Regulations that take incentives into account are called incentive compatible regulations and are designed to maximize economic value by inducing fishers to truthfully reveal their preferences elicited by the policy device. Incentive compatible tools include right or tenure based regimes, taxes or royalties or community based management. Regulations that do not take into account incentives are destined to fail and the bycatch of billfish in the Caribbean is an example of this type of failure as billfish resources are overexploited in the industrial and small scale fisheries and value is being lost in the recreational fishery. Current, top down management policies block the natural behavior and preferences of commercial harvesters, small scale fishers and recreational anglers such that their normal behavior subverts the goal of the mechanism. [ABSTRACT FROM AUTHOR]