Dr. Rashid Sumaila is a prominent Fisheries Economist and Professor at the University of British Columbia, Canada. He is deeply interested in how economics, through integration with ecology and other disciplines, can be applied to ensure sustainable use of environmental resources.
FEME: Some authors (for example, Acemoglu &Robinson. 2013. Why Nations Fail, 2013) argue that, in general, fewer laws and regulations and less bureaucracy could help nations achieve higher levels of development. Do you agree with this view? Do you think the same principles could be applied to fisheries management?
Rashid Sumaila: The problem I see with this statement is that these authors say: “… fewer laws and regulations and less bureaucracy could help nations achieve higher levels of development”. Two questions immediately come to mind.
First, what do the authors mean by ‘fewer laws’? Does it mean that if one country has 10 regulations and another has a million for the management of similar fisheries, for example, would reducing regulations to 9 and 999,999 for the two fisheries, respectively, help the two to achieve higher levels of development? Second, what do the authors mean by development: higher GDP, higher score in the UN Development Index (HDI)? If it is GDP then no regulation may be the best but if it is the latter (i.e. the level of HDI), it depends.
Given the last paragraph, I do not agree with the authors because the important thing is to implement an optimal set of regulation to help managers and policy makers achieve their goals for the fishery.
FEME: Many papers have debated fishing subsidies, including your publication from 2010’s Journal of Bioeconomics (DOI 10.1007/s10818-010-9091-8). Would you consider subsidies (the capacity enhancing subsidies) as one mechanism for market regulation, once they support economic and ecologically unsustainable fisheries? Could the reduction or even the ceasing of those subsidies stimulate actors involved in fishing activity to produce sustainable innovation and protection of fish stocks?
Rashid Sumaila: The justification for imposing taxes or providing subsidies to an economics sector comes from the existence of externalities, which occurs when producing or consuming a good causes an impact on third parties not directly related to the transaction. Positive externalities have a positive impact while negative externalities impact third parties negatively. Hence, to achieve maximum benefits for society, subsidies are provided in the case of positive externalities, and taxes are imposed in the case of negative externalities. Since the provision of capacity-enhancing or harmful subsidies results in overfishing of fish stocks, it makes no economic sense.
So the answer to your questions are yes eliminating those subsidies would reduce overfishing while stimulating fishers innovate.