0. Introduction
Before we can usefully discuss different systems of fisheries management and their relative merits, it is necessary to agree about the social purpose of the fisheries. Why do we engage in this difficult and often dangerous activity called fisheries? The reason is fundamentally the same as for any other production activity. We pursue fisheries in order to produce valuables to improve our standard of living. The fact that some people enjoy fishing more than other activities, that there is certain romanticism associated with fishing and that some people fish for recreation does not alter this fundamental purpose of the fisheries any more than similar attitudes toward airplane piloting, house construction and farming transforms these production activities into something else.
So, fishing is fundamentally a production activity. As such it is no different from other industries. It follows that its social purpose is to maximize the net value of production, i.e. the difference between the value of landings and the cost of producing these landings. In this way the contribution of the fisheries to the GDP and, hence, general welfare is maximized. Anything else implies economic waste. Economic waste means that goods that could have been used to increase someone’s personal utility are squandered. That, of course, is morally reprehensible.
So the social purpose of the fishing activity is the same as for any other production activity; to produce as much net output as possible. This is equivalent to maximizing profits or more generally economic rents in the fishery. It follows immediately that fisheries management systems must be judged by the same criteria.
The more net output a fisheries management system induces the fishing industry to produce, the better is the fisheries management system. The best fisheries management system is the one that induces the fishing industry is produce the maximum sustainable net output is the best.
1. The Fisheries Problem
Ocean fish stocks have traditionally been regarded and arranged as common property resources. Thirty years ago the common property arrangement was virtually universal.
Today, at the outset of the 21st Century, it is still the most common arrangement in
Ocean fisheries.
Common property resources, it is well known and established (Hardin 1967) are subject to fundamental economic problems of over-exploitation and economic waste. In fisheries, the common property problem manifests itself in:
(1) Excessive fishing fleets and effort,
(2) Too small fish stocks.
(3) Little or no profitability and unnecessarily low personal incomes.
(4) Unnecessarily low contribution of the fishing industry to the GDP.
(5) A threat to the sustainability of the fishery

The fundamental problem is captured by the diagram in Figure 1.
Figure 1
The sustainable fisheries model
Optimal
Sustainable values,
$
Common
Property
Costs x c x * e * e c
Revenues
Effort, e
Biomass
2
Sustainable
biomass, x
Figure 1 illustrates the revenue, biomass and cost curves of a typical fishery as a function of fishing effort. Fishing effort here may be regarded as the application of the fishing fleet to fishing. The revenue and biomass curves are sustainable in the sense that these are the revenues and biomass that would apply in the long run, if fishing effort was kept constant at the corresponding level.
The lower part of Figure 1 describes what happens to sustainable biomass as fishing effort is increased. Note that the level of biomass is measured in a down ward direction so that the sustainable biomass is monotonically reduced as fishing effort is increased. If, as illustrated in the diagram, fishing effort exceeds a certain level, the stock size becomes insufficient for regeneration

the fishery is no longer sustainable at that effort level

and a stock collapse occurs.
The upper part of Figure 1, is the well known sustainable fisheries model initially forwarded by Gordon (1954). As illustrated there, sustainable revenues initially increase with fishing effort but at a declining rate as the biomass is reduced.
At a certain level of fishing effort, sustainable revenues are maximized. If fishing effort is increased beyond this point, sustainable revenues decline as the biomass level is reduced still further. Finally, at a certain level of fishing effort, the fishery is no longer sustainable. The stock collapses and there will be no sustainable revenues. As drawn in Figure 1, costs, on the other hand, increase monotonically with fishing effort.

3
Looking at Figure 1, quickly reveals that the socially optimal level of the fishery occurs at fishing effort level e *. At this level of fishing effort, profits and consequently the contribution of the fisheries to GDP is maximized.
1
Notice that the optimal fishing effort e * is less than the one corresponding to the maximum sustainable yield. Consequently, the optimal sustainable stock level, x *, is comparatively high as can be read from the lower part of Figure 1. The optimal fisheries policy, consequently, is biologically conservative. Indeed the risk of a serious stock decline is generally very low under the optimal sustaianble fisheries policy.
Under the common property arrangement of the fishery, the fishing industry will find an equilibrium at fishing effort level, e c
. At this level of fishing effort, costs equal revenues and there are net profits or rents in the fishing industry. If, at the same time fishing labour is paid its reservation wage the net contribution of the fishery to the GDP is approximately zero.
2
In other words the competitive fishery contributes virtually no net benefits to the economy. Notice that this is the equilibrium outcome in any common property fishery irrespective of the size and productivity of the underlying natural resource.
The reason for this unfortunate outcome is not difficult to understand. Assume for instance that fishing effort is below the equilibrium level, e c
. At this level of fishing effort there will be profits. This does two things. It encourages the existing fishermen to expand their operations in order to increase their profits. It attracts new participants wanting to partake in these profits into the fishery. Thus investment in fishing capital takes place and fishing effort rises. Obviously this process will continue as along as there are any profits to be had in the fishery. Equilibrium in the common property fishery will only be reached when there are no profits, i.e. at effort level e c
.
Compared to the net-benefits obtainable by the optimal fishery, the common property arrangement is highly wasteful. Not only does it generate little or no net economic benefits, it also implies a much smaller biomass level. Indeed, as can easily be verified from inspection of Figure 1, the common property fishery may easily imply the exhaustion of the biomass altogether.
In is important to realize that fishermen subject to the common property arrangement can do noting to avoid this wasteful outcome. When many fishermen share ownership in a common fish stock, each has every reason to grasp as large a share of the potential yield as possible. Prudent harvesting by one fisherman in order to maintain the stocks will, for the most part, only benefit the other more aggressive fishermen without preventing the ultimate decline of the stocks. Thus, each fisherman, acting in isolation, is powerless to alter the course of the fishery. His best strategy is to try to grasp as large a share in the fishery as possible while the biomass is still large enough to yield some profits (Bjorndal and Scott 1988).
1 This assumes that all the relevant prices are true market prices.
2 The assumption that labour receives its reservation wage is, in the market economy, equivalent to assuming that the labour market is in equilibrium, including no involuntary unemployment. In a situation of excess supply of labour in the fishing industry or generally, even a common properrty fishery will generate some additions to the GDP.

4
This in a nutshell is what has been called the tragedy of commons (Hardin
1968). The common property arrangement in fisheries basically forces the fishermen to overexploit the fish resources, even against their own better judgement. As a result, the potential benefits of these resources, no matter how great, becomes wasted under the onslaught of a multitude of users.
2. Fisheries Management Systems
To solve the fisheries problem, a great number of different management schemes have been suggested and tried. Most of theses, however, may be conveniently grouped into two broad classes; (1) biological fisheries management and (2) economic fisheries management, as illustrated in the following Figure.
Figure 2
Fisheries Management Systems: Classification
Biological fisheries management
Direct
Economic fisheries management
Indirect
Taxes
Property
rights
Economic fisheries management may be further divided into (i) direct restrictions and
(ii) indirect economic management. The difference between these two categories is that direct economic management consists of explicit restrictions on the activity of the fishermen, while indirect management merely changes the incentives facing the fishermen.
To make a long story short, the only fisheries management methods that on theoretical grounds have any chance of success are indirect economic ones.
Biological fisheries management, such as mesh size regulations, total allowable catch, area closures, nursery ground protection etc, may conserve and even enhance the fish stocks. They, however, fail to generate net economic benefits because they do not remove the common property nature of the fishery that is at the root of the fisheries problem.

5
The same applies to direct economic restrictions. Such restrictions take various forms. There are limitations on days at sea, fishing time, number of vessels, holding capacity of the vessels, engine size, etc. These methods fail to generate economic rents because they do not remove the common property nature of the fishery either. As a result, the fishermen are still be forced to compete with each other for a share in the catch until all net economic benefits have been wasted through expansion of uncontrolled inputs.
In addition to this it is important to realize that setting and enforcing biological and economic fisheries restrictions is invariably costly. Usually, these costs are quite substantial.
3 Since, these measures do not generate any economic benefits, at least not in the long run, these costs represent a net economic loss. Consequently, we are driven to the somewhat distressing conclusion that these fisheries management methods
 biological fisheries management and may be worse than nothing!
Indirect economic fisheries management may be divided into taxation and various types of private property rights.
The appropriate taxation of the fishing industry can in principle induce the industry to operate in the social optimal way. Taxes can do this by reducing revenues, as illustrated in Figure 3, or increasing the costs of fishing. In practice, however, there
Figure 3
The effect of tax on landings
Revenues;
No Tax
$
Costs x c x * e *
Tax e c
Revenues
With Tax
Effort, e
Biomass
Sustainable
biomass, x are severe technical and social problems with using taxes as a fisheries management tool (Arnason 1990). For this reason, fisheries management by means of taxes has not been used in any significant ocean fishery so far.
Property rights based regimes, on the other hand, especially ITQ systems, have been widely applied and met with a fair degree of success.
3 According to Arnason et al. 2000, fisheries management costs typically range from 3-20% of the gross value of the harvest.

Property rights based approaches to fisheries management attempt to eliminate the common property problem by establishing private property rights over the fish stocks. Since the source of the economic problems in fisheries is the absence of property rights, this approach should in principle be successful in securing full economic benefits from the fishery.
Several types of property rights regimes have been employed to alleviate the fisheries problem. These include territorial use rights (TURFs), individual catch quotas and community fishing rights.
Figure 4
Types of Property Rights Regimes
6
Territorial use rights
Territorial use rights (TURFs) consist of the allocation of a certain area of the ocean and the associated seabed to a single owner (user). Being perfectly parallel to a farm property on land, the owner will have every incentive to husband his TURF efficiently. Consequently, this arrangement works fine for relatively sedentary fish stocks, i.e. those that remain within the confines of the TURF. In fact, for those species TURFs are close to being the ideal fisheries management system. Not only will the provide close to perfect property right over the fish stocks in question, they also give the TURF-holder good deal of control over many of the environmental variables, e.g. seabed etc. on which the fish stock depends. For relatively migratory stocks, i.e. stocks that periodically migrate in and out of the TURF-area, the effectiveness of TURFs as a fisheries management system is much reduced. Indeed, the indications are that if the stock in question does not have to spend much time outside the TURF for its beneficial effects to be virtually nullified (Arnason et al.
1999). This, obviously, greatly reduces the applicability of this method.
4
4 Unless, of course, the TURFs can be made sufficiently large.

7
TURFs have been employed in several shellfish (oyster (USA), mussels and scallops (NZ), ocean quahog (Iceland) fisheries around the world with seemingly very good results. Some fisheries in Japan and some Pacific reef fisheries have also been managed on the basis of communal or group TURFs.
Individual quotas
Individual quotas have been widely applied around the world with a fair degree of success. Transferable and perfectly divisible catch quotas are usually referred to as individual transferable quotas or ITQs. If the ITQs are also permanent they constitute a complete property right just like a building or a piece of land. In that case, standard economic theory should apply and, barring market imperfections, the fishery should automatically reach full efficiency.
With permanent and transferable catch quotas the quota holders will find it to their advantage to preserve and, if necessary, rebuild the marine resources. After all, larger fish stocks means more profitable fishing operations. Moreover, the market value of their permanent quota, as a share in the future TACs, depends on the state of the fish stocks and the sustainability of the fishery. The larger the fish stocks the higher the value of their permanent quota share. Thus, the ITQ system provides the fishing firms with a powerful incentive to preserve the fish stocks and, in fact, the marine ecology as a whole.
Since the ITQ system goes a long way toward eliminating the basic common property problem of fisheries and are widely applicable, there has now emerged a consensus among fisheries economists that this management system offers the most promising general approach to managing ocean fisheries. This does not mean, however, that ITQs are necessarily the best management in all fisheries. For instance, a prerequisite for this method to work is that the individual quota constraints should be enforceable. If that is not the case, some other management method may be preferable.
Community Fishing Rights
Under a system of community fishing rights, exclusive harvesting rights are given to a community e.g. group of fishermen, village, municipality etc. These exclusive rights may be to the whole fishery or to a certain share of the fishery, e.g. in the form of a fishing quota. With this exclusive asset in hand, the hope is that the group will somehow find a way to manage it efficiently. Fundamentally this belief rests on a well know argument by Coase (1960). The argument is that if property rights are clearly defined and bargaining and enforcement costs sufficiently low, then there is good reason to expect the parties involved to come to a mutually and beneficial conclusion.
In the case of the fishery the mutually beneficial conclusion would be the introduction of an efficient fisheries management.
The great advantage of communal fishing rights are that they are often (1) socially acceptable and (2) facilitate effective enforcement of fisheries management rules on the basis of social and physical proximity and social group pressure.

8
Obviously for this advantage to be effective, the group or community in question has to be reasoably small and socially coherent.
The main disadvantage of communal fishing rights as a way toward good fisheries management is that this simply may not happen. Community fishing rights is not a fisheries management system. They merely represent a devolution of the fisheries management authority from a higher level to a lower level. The community will still have to deal with the problem of implementing a good fisheries management system.
The fisheries management coming out of the community depends on various factors including the decision making process, group dynamics and coherence. The management system adopted can easily be just as inefficient as the one it started with.
Therefore to increase the probability of success, it is imperative to (i) give fishing rights to as small and coherent community of fishers as possible and to exclude alternative interests such as those of labour, suppliers and purchasers (ii) set up the communal decision process so as to encourage efficiency.
Thus, it is important to realize that Community fishing rights is no fisheries management panacea. The fisheries management coming out of the community process can e anything and is always uncertain. At best it can approach the efficiency of ITQs. At worst it will simply replicate the common property fishery.
Nevertheless, community management of fisheries may be the best option where there are (i) political and social problems with introducing individual rights and
(ii) technical problems in enforcement of individual rights. these problem often pop up in artisanal type of fisheries
3. ITQs around the world
Since the general extension of national exclusive economic zones to 200 miles in the
1970s there has been a clear trend toward the adoption of property rights-based fisheries management systems worldwide. Although there are some notable cases of territorial use rights and community fishing rights, the development has primarily been toward regimes of individual quotas (IQs) and individual transferable quotas
(ITQs).
IQs are already quite common. They are widely used in Europe, Russia,
Southern Africa, America and even Japan. An interesting aspect of IQs is that they tend to evolve over time into fully fledged ITQs. Having secured valuable property rights in the form of IQs, the holders soon push for permission to trade these rights.
After all, this possibility only enlarges their opportunity set. This path of evolution has taken place for instance in Iceland, Holland, Greenland and Namibia.
ITQs have been implemented in several hundred ocean fisheries around the world. Well over 5% of the total ocean fish harvest is currently taken under ITQs.

9
The first ITQ systems were implemented in the 1970s. Currently, at least seven significant fishing nations — Australia, Canada, Greenland, Holland, Iceland,
Namibia and New Zealand —employ ITQs as a major component of their fisheries management system (OECD 1997, Arnason 1996). Several others, including Chile,
Mosambique, Portugal, Mexico and the United States, use ITQs in some of their fisheries (OECD 1997). Important fishing nations such as Peru, Argentina and
Morocco are preparing the introduction of ITQs in some or all of their fisheries.
Thus, the ITQ fisheries management system can hardly be said to be experimental any longer. A great deal of experience with the system has been accumulated in numerous fisheries all over the world for the past 25 years.
The experience with ITQs has generally been quite positive. Fishing effort has usually decreased and fishing fleets contracted. Depleted stocks have recovered and the quality of landed catch has increased. In fact, due to the increased emphasis on product value and quality, total employment in the fishing industry has usually not been found to contract. Finally, economic rents have generally greatly increased. It seems that ITQs are the only fisheries management system currently employed around the world that can claim this degree of general success. As a result, ITQ managed fisheries are getting more numerous every year.
4. Experience of ITQs: The case of Iceland
Iceland was among the first fishing nations in the world to adopt the ITQ fisheries management system in her fisheries. The earliest IQ/ITQ systems there came into operation 20-25 years ago. It is therefore of considerable interest to review Iceland’s experience of the system. This experience also has relevance for judging the efficacy of ITQ system in general for the Icelandic experience is quite similar to the experience of other early adopters of the ITQ system such as the Netherlands (Davidse 1995) and
New Zealand (Major 1999).
Since the extension of the fisheries jurisdiction to 200 miles in 1976, a variety of fisheries management measures have been tried in Iceland including (a) overall catch quotas, (b) fishery access licenses, (c) fishing effort restrictions and (d) individual vessel catch quotas.
With increased experience, however, there has been a clear preference for the adoption of ITQs in the management of all fisheries. This progress, however, has differed substantially between the various fisheries. The chronology of this development toward the ITQ system is summarized in the following Table:

10
Table 1
Key Steps in the Evolution of the ITQ Management System:
A Chronological Overview
Year
1975
1979
1980
1984
1985
1986
1991
Herring fishery: Individual quotas (IQs)
Herring fishery: Individual transferable quotas (ITQs)
Capelin fishery: Individual quotas (IQs)
Demersal and crustacean fisheries: Individual transferable quotas (ITQs)
Demersal fisheries: Effort quota option introduced
Capelin fishery: Individual transferable quotas (ITQs)
A complete uniform system of ITQs in all fisheries
An IQ system was adopted in the herring fishery in 1975. In 1979, the quotas were made transferable transforming the system into a fully fledged ITQ system. This, incidentally, seems to be one of the first ITQ systems adopted in a major ocean fishery.
An IQ system was introduced in the Icelandic capelin fishery in 1980 and in the important demersal fisheries in 1984. A year later, however, this ITQ system was compromised by introducing an option for vessels to choose limited effort instead of a
ITQ restriction. This option, called the Effort Quota, was selected by many vessels with the result that between 1986 and 1990, when the option was abolished over half of the demersal catch was taken under the effort quota option.
Since 1991, most Icelandic fisheries have been managed on the basis of a uniform system of individual transferable vessel quotas. This system, however, is still under development. It was modified in 1992 and again in 1994 and 1996.
The essentials of the current ITQ system are as follows:
(1) The quotas constitute a right to catch a given proportion of the TAC every year.
(2) The quotas are perfectly divisible and transferable with minor restrictions on trans-regional transfers.
(3) All important commercial fisheries are subject to these quotas.
(4) The quotas were initially allocated on the basis of catch history prior to the institution of the quota system.
(5) The quotas are subject to a small fee to cover administration and enforcement costs.
Currently, 16 species (and about 30 substocks) are subject to the ITQ system.
These species account for over 95% of the volume of harvest taken within the
Icelandic 200 mile EEZ.
Outcomes

11
The individual vessel quota system in Iceland seems have yielded considerable economic benefits. New investment in fishing capital has been reduced and the fishing fleet has contracted. In some fisheries the number of operating vessels has dropped significantly. Fishing effort has also been significantly reduced. Finally, estimates of the actual economic rents generated by the system as well as analysis of quota values strongly indicate that very substantial economic benefits are already being generated by this management system.
To substantiate these claims let’s briefly review the experience of Iceland’s major fisheries:
The pelagic fisheries
The pelagic fisheries are essentially based on two species; herring and capelin. The predominant fishing gear is purse seine. The herring fishery was subjected to IQs in
1975 and ITQs in 1979. The much larger capelin fishery was came under IQs in 1980 and ITQs in 1986. So the big change came in the early 1980s
Since then there has been a dramatic decline in the number of the number of fishing vessels and a smaller decline in the total tonnage (GRT) of the pelagic fleet.
This is illustrated in Figure 5
Figure 5
The Pelagic Fishery: Fleet Developments
(Maximum number of vessels in any one month)
50 160
140
120
100
80
60
40
20
0
1977 1980 1985 1990 1995
No. of vessels (left axis) Total tonnage, GRT (right axis)
40
30
20
10
0
At the same time the pelagic catches have increased, so there has been a substantial increase in the catch per unit of fleet (metric tonnes/GRT) as illustrated in
Figure 6.

12
60
50
40
30
20
10
Figure 6
Pelagic Fishery: Catch per Unit of Fishing Fleet
(Metric tonnes/gross registered tonne)
70
0
1977 1980 1985 1990 1995
Now in pelagic purse seine fisheries, catch per unit of fleet is a good indicator of productivity. Hence the experience in the pelagic strongly suggests a dramatic increase in the technical efficiency in this fishery.
Demersal fisheries
From 1978 to 1984, the Icelandic demersal fisheries were managed on the basis of effort restrictions in the form of limited fishing days for cod. An ITQ system was introduced in 1984. However in 1985 this was supplemented with an option to go for limited fishing days instead of a catch quota. As it turned out, a large number of vessels took this option with the result that from 1986 to 1990 more than half of the demersal catch was taken under effort restrictions rather than quota restrictions. The effort option was made less attractive in 1988 and abolished at the end of 1990. Since
1991 a fairly pure form of the ITQ system has been in operation in the Icelandic demersal fisheries.
The experience of this system is to a certain extent illustrated in the following
Figure

13
Figure 7
The Evolution of the Demersal Fishing Fleet and Effort
Index
1,5
1,3
1,1
0,9
0,7
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996
Effort (ton-days) Fleet (value)
As indicated in Figure 7, periods where the fishery was managed on the basis of effort controls

a typical direct economic restriction

corresponds to a period of increasing fleet size and fishing effort. On the other hand, the periods of the ITQ management have implied substantially reduced fishing effort and a slowly reduced fishing fleet. Thus from 1990 to 1997, under the complete ITQ system, demersal fishing effort was reduced by over 30%. A similar speedy reduction in fishing effort occurred in 1984-5 when ITQ restrictions were dominant. Thus, clearly, the ITQ system has brought the demersal fishery towards greater efficiency.
Another, and more direct way to assess the efficacy of the ITQ system in the demersal fisheries to look at quota values. As the quotas are transferable, an efficient market for trading them has evolved. According to standard economic theory, the total market value of quotas should provide us with a good measure of the net rents generated in the fishery.
The evolution of the annual quota values is illustrated in Figure 8. This figure, more precisely, describes the total annual rental value of quotas in all Icelandic fisheries

14
Figure 8
Annual Quota Rental Values in the Icelandic Fisheries
(Million USD)
200
150
100
50
0
500
450
400
350
300
250
1984 1986 1988 1990 1992 1994 1996 1998
As shown in Figure 8, the quota valuation of the Icelandic fisheries has greatly increased form 1984 onward. It is currently about USD 450 million per annum, almost
20 times what it was in 1984. This implies two things:
1.
Since 1984, under the ITQ fisheries management system, the efficiency of the fisheries has increased dramatically.
2.
Currently, the economic rents generated by the fisheries, as measured by the quota price evaluation, constitutes a substantial fraction of the average landed value.
Conclusion:
The experience of the ITQ system in Iceland has been very favourable. This, however, is by no means unique. Reports from the Netherlands, New Zealand and Australia where ITQs have been in operation for some years is similarly encouraging. Similar results seem to have been experienced in more recent ITQ systems as diverse as the
Australian bluefin tuna fishery (Geen 1989), Canadian groundfish and sablefish fishery (Turris 1999). The US ocean quahog and wreckfish fisheries (Anderson 1992), the Greenland demersal and shrimp fishery (Arnason 1996).
Broadly speaking, the ITQ fisheries management system seems to have lived up to its theoretical promise in applications in fisheries all over the world. The few difficulties that have been reported
5
are generally associated with the difficulty of properly enforcing the property rights on which the system is based.
5 E.g the Australian South-west trawl fishery and the problem of discarding.

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5. Fisheries Management: Future Developments
The first thing to realize is that there are no new fisheries management techniques in sight nor are there any likely to emerge. It seems that all the fundamental fisheries management systems capable of generating fisheries rents have already been discovered. In fact, all the fundamental fisheries management techniques current today had already been suggested and described by the early 1970s.
It follows that improvements in global fisheries management will primarily come from (a) wider adoption of efficient fisheries management systems already in use such as the ITQ system and (b) relatively minor improvements of current systems.
In addition, increased devolution of fisheries management authority and increased reliance on the community-based fisheries management arrangement is likely to occur.
1.
Expanded use of ITQs
It seems inevitable that the use of ITQs will continue to expand during the coming years. More fisheries in Canada and Mexico will come under ITQs. Following the end to the temporary moratorium on new ITQ systems in the USA, it is virtually certain that a number of fisheries there will soon come under some form of ITQ management.
ITQs are already being actively prepared in the most important Latin American fishing countries such as Peru, Chile and Argentina. Chile already has ITQs in certain small fisheries. It now seems only a question of a short time, a few years at most, until one or more of these nations will adopt ITQs as its main fisheries management system.
The same applies to some important African fishing countries such as Mosambique,
South Africa, Morocco, Senegal, Gambia and Uganda. At the same time the creeping trend toward ITQs in European countries such as Britain and France is likely to continue. The notable laggard in this development are the inshore fisheries of Southeast Asian fishing nations such as Japan, China, Indonesia, Thailand and India where artisanal type of operations fisheries are dominant.
Although difficult to predict with confidence, it seems not unlikely that ITQs will move from some 5 million tonnes or 5-7% of the global marine catch to some 20 million metric tonnes or 25% of the global catch within the next 10 years.
2.
Improvement of current ITQs
At the same time, we are likely to see improvements in the design and operation of existing ITQ systems. This will occur primarily to increase the efficiency of the system, a trend spurred on by the relentless push for increased efficiency in the

16 fisheries. These improvements will take many forms. However, important among them will be:
(a) More secure and long term individual quota rights.
This will lead to more efficiency in the use of the fish stocks and their habitat, the setting of TACs and investment in fishing capital.
(b) Increased ITQ transferability.
This opens many doors including (i) international trading of quotas just as any other commodity thus allowing global specialization in the fishing activity. (ii) trading harvesting rights between alternative users of living marine resources such as recreational fishermen, conservationists and the tourist industry, thus allowing a better overall use of the ocean resources
The possibility of trading harvesting rights between fishermen and conservationists is particularly interesting. It offers the way to resolve a longstanding conflict of increasing intensity via market trades. If conservationists are more hurt by increased harvest than the fishermen benefit from it, they will simply buy the corresponding harvesting right from the fishermen and vice versa. In this way, the increased tradability of ITQ-rights between all sectors of the economy and, indeed, globally will facilitate the attainment of the overall optimal use of the scarce resources of the ocean.
(c) More detailed quotas by grades
One may also expect that the ITQs of the future will, in many cases, not be restricted to species of fish but subdivided according to grades or sizes of fish.
Thus, for long-lived fish with significant price difference between fish sizes there may easily separate TACs, and consequently ITQs, by size of fish. For instance, in the simplest case there would be one TAC set for large fish and another one for small fish. This accomplishes two objectives. First this makes it easier to control and tune the evolution of the stock biomass. Second, it reduces the problem of discarding inferior (most often smaller) fish because it is not sufficiently valuable to cover the quota price. If there is a separate TAC for small fish, that tends to be discarded, the quota price for that kind of fish will be correspondingly reduced. Hence the extra incentive to discard generated by the aggregate ITQ system will be eliminated and the problem of discarding correspondingly alleviated.
(d) Co-management and self-management
The ITQ system offers the opportunity for extensive co-management and selfmanagement of the fishery that most fishing nations have yet to exploit. Comanagement means that the management of the fishery

setting the TAC, carrying out research, enforcing quota restrictions fisheries etc.

is shared between the fisheries authorities and the fishing industry itself. Selfmanagement means that the fishing industry itself takes these functions completely over. The key to this is that the ITQ system (assuming reasonably long lasting quotas) gives the quota holders a vested interest in the future of the fishery. In other words the ITQ system (with reasonably long lasting or

17 permanent quotas) provides the industry with the right incentives to develop the fishery in the socially optimal way. The government, on the other hand, as is well known (Andersen et al. 1998), does not have these incentives. The other advantage is that since the incentives are right the industry as a whole can be relied on to do this in the most efficient manner and certainly less expensively than the government.
3.
Community property rights
Community fisheries management based on community rights has attracted a good deal of attention in recent years (Pitcher et al. 1998, Hanna et al. 1996). The basic idea, as already discussed, is to allocate exclusive fishing rights to a community e.g. group of fishermen in the hope that this group will somehow find a way to manage its asset efficiently.
Although, in most cases, it would be overly optimistic to expect a speedy resolution to the fisheries problem on the basis of community fishing rights, the allocation of exclusive fisheries property rights to communities may actually be the best option in many situations where the implementation of individual quota property rights are simply not feasible. This actually seems to be the case in many fisheries in the world, not least many artisanal types of fisheries where there is a great number of participants and little social infrastructure. In addition, the devolution of fisheries management authority to communities may, in many cases, remove a thorny problem from the higher authority and thus be politically attractive. For these reasons one may expect a significant expansion in this form, or rather framework, of fisheries management in the future.

18
References
Andersen, P., J.G. Sutinen and K. Cochran. 1998. Paying for Fisheries Management.
Paper presented at IXth IIFET conference. Tromsoe
Anderson, L.G. 1992. Consideration of the Potential Use of Individual Transferable
Quotas in U.S. Fisheries, Vol. 1. Overview Document . National Oceanic and
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