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on Regulation |
| By: | Ojo, Marianne |
| Abstract: | Through a focus on the ever increasing need to address information asymmetries, as well as reference to the uniqueness of the degree to which systemic risks are triggered in banking, this paper aims primarily to highlight reasons why government and central bank intervention are essential and required in financial regulation. The role presently assumed by regulation is not the same as it was thirty years ago. Deregulation and conglomeration have significantly altered the landscape in which regulation previously existed and to an extent, defined the role which it presently assumes. For this reason, arguments which were (and have been) directed against government, central bank intervention, as well as the role of regulation, require re-evaluation. Deposit insurance and lender of last resort arrangements serve to instil confidence in depositors hence contributing towards safeguarding system stability and preventing unnecessary runs where panics occur. Such benefits are not only considered against those arguments advanced by antagonists of deposit insurance and lender of last resort arrangements, but also against those views which do not favour government and central bank intervention. In evaluating whether free banking is equipped with as many mechanisms and safeguards required in safeguarding the stability of the financial system, the urgency for such safety net instruments, which is attributed to the peculiar and unique nature of banking, will be considered. Contrary to the argument [that “if markets are generally better at allocating resources than governments are, then the differences or distinctions which exist between “money” and the industry that provides it (the banking industry) should not serve as bases for an assumption that money and banking are exceptions to the general rule”], it has to be highlighted (for several reasons) that the banking industry could not be equated to other areas of the financial sector. One of such reasons relates to the extent to which the impact of systemic runs differ within the banking sector when compared to other areas such as the securities markets. The differences in the nature of risks which exist in banking and those which exist within the securities markets, constitutes another reason why the need for government and central bank intervention is advocated. Furthermore, even though the nature of banking risks warrants government and central bank intervention – as well as capital adequacy regulation, capital regulation should also be extended to the securities markets for many reasons – one of which is the ability to securitise assets. If there was no longer a role for regulation, then re- regulation should not have occurred in certain jurisdictions which have adopted and successfully implemented consolidated supervision. |
| Keywords: | asymmetric information; lender of last resort; central banks; systemic; regulation; deposit insurance; free banking |
| JEL: | E0 K2 E5 D8 |
| Date: | 2010–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23298&r=reg |
| By: | Hamadi Matoussi (University of Manouba, Ariana, Tunisia); Maha Khemakhem Jardak |
| Abstract: | Corporate governance has drawn much attention with recent managerial misbehavior and corporate scandals. Various laws and reports around the world came up with propositions and regulation to restore confidence and reinforce investor protection. La Porta, Lopez, Shleifer and Vishny (LLSV 1998-2002) built up their theory on the protection of investors by the legal system. Roe’s political theory (2003) challenges the LLSV’s legal theory and provides another explanation for the differences between countries centered on the political variables. The cultural theory (Licht 2001) argues that cross country differences in corporate governance can be explained by differences between national cultures. The objective of this research is to examine the disparity and the determinants of the investor protection regulations around the world. More specifically, we try to explain this disparity by legal and cultural variables. We investigate empirically the disparity of the investor protection regulations measured by the index established by the World Bank across 81 emerging and developed countries in 2006. Our results confirm that combining classifications based on cultural dimensions, religion and on legal families can shed some light on the obscure part of the comparative analysis of corporate governance and investor protection. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:503&r=reg |
| By: | Arik Levinson |
| Abstract: | With few exceptions, economic analyses of "cap-and-trade" permit trading mechanisms for climate change mitigation have been based on first-best scenarios without pre-existing distortions or regulations. The reason is obvious: interactions between permit trading and other regulations will be complex. However, climate policy proposed for the U.S. will certainly interact with existing laws, and will also likely include additional regulatory changes with their own sets of interactions. Major bills introduced in the U.S. Congress have included both permit trading and traditional command and control regulations – a combination sometimes called "belts and suspenders." This paper discusses interactions between these instruments, and begins to lay out a framework for thinking about them systematically. The most important determinant of how the two types of instruments interact involves whether or not the cap-and-trade permit price would induce more or less abatement than mandated by the traditional standards alone. Moreover, economists' experience predicting the costs of environmental regulations suggests we are more likely to overestimate the costs of cap-and-trade, and therefore the price of carbon permits, than we are to overestimate the costs of a traditional regulatory standard, and that therefore the regulatory standards will likely reduce the cost-effectiveness benefits of cap-and-trade. |
| JEL: | Q58 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16109&r=reg |
| By: | Boockmann, Bernhard (Institut für Angewandte Wirtschaftsforschung (IAW)) |
| Abstract: | This paper provides a meta-analysis of 55 empirical studies estimating the employment effects of minimum wages in 15 industrial countries. It strongly confirms the notion that the effects of minimum wages are heterogeneous between countries. As possible sources of heterogeneity, it considers the benefit replacement ratio, employment protection and the collective bargaining system. While the results are in line with theoretical expectations, the degree to which they are robust differs across these institutions. |
| Keywords: | minimum wage, regulation, employment, meta-analysis |
| JEL: | J38 J20 C12 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4983&r=reg |
| By: | Erin T. Mansur |
| Abstract: | This chapter examines the tradeoffs of regulating upstream (e.g., coal, natural gas, and refined petroleum product producers) versus regulating downstream (e.g., direct sources of greenhouse gases (GHG)). In general, regulating at the source provides polluters with incentives to choose among more opportunities to abate pollution. This chapter develops a simple theoretical model that shows why this added flexibility achieves the lowest overall costs. I broaden the theory to incorporate several reasons why these potential gains from trade may not be realized--transactions costs, leakage, and offsets--in the context of selecting the vertical segment of regulation. |
| JEL: | Q4 Q5 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16116&r=reg |
| By: | Bourlès, R.; Cette, G.; Lopez, J.; Mairesse, J.; Nicoletti, G. |
| Abstract: | The paper focuses on the influence of upstream competition for productivity outcomes in downstream sectors. This relation is illustrated with a neo-Schumpeterian theoretical model of innovation (Aghion et al., 1997) with market imperfections in the production of intermediate goods. In this context, upstream market imperfections create barriers to competition in downstream markets and upstream producers use their market power to share innovation rents sought by downstream firms. Thus, lack of competition in upstream markets curbs incentives to improve productivity downstream, negatively affecting productivity outcomes. We test this prediction by estimating an error correction model that differentiates the potential downstream effects of lack of upstream competition in situations close and far from the global technological frontier. We measure competition upstream with regulatory burden indicators derived from OECD data on sectoral product market regulation and the industry-level efficiency improvement and the distance to frontier variables by means of a multifactor productivity (MFP) index. Panel regressions are run for 15 OECD countries and 20 sectors over the 1985-2007 period with country, sector and year fixed effects. We find clear evidence that anticompetitive regulations in upstream sectors have curbed MFP growth downstream over the past 15 years. These effects tend to be strongest for observations (i.e. country/sector/period triads) that are close to the global technological frontier. Our results suggest that, measured at the average distance to frontier and average level of anticompetitive regulations, the marginal effect of increasing competition by easing such regulations is to increase MFP growth by between 1 and 1.5 per cent per year in the OECD countries covered by our sample. Our results are robust to changes in the way MFP and the regulatory burden indicators are constructed, as well as to variations in the sample of countries and/or sectors. |
| Keywords: | Productivity, Growth, Regulations, Competition, Catch-up. |
| JEL: | O43 L5 O57 L16 C23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:283&r=reg |
| By: | Matthew J. Kotchen |
| Abstract: | Can simple government programs effectively promote voluntary initiatives to reduce greenhouse-gas emissions? This paper provides an evaluation of how the Connecticut Clean Energy Communities program affects household decisions to voluntarily purchase “green” electricity, which is electricity generated from renewable sources of energy. The results suggest that, within participating communities, subsidizing municipal solar panels as matching grants for reaching green-electricity enrollment targets increases the number of household purchases by 35 percent. The Clean Energy Communities program thus demonstrates how mostly symbolic incentives can mobilize voluntary initiatives within communities and promote demand for renewable energy. |
| JEL: | Q2 Q4 Q58 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16117&r=reg |
| By: | Severin Borenstein |
| Abstract: | Human activity has disrupted the natural balance of greenhouse gases in the atmosphere and is causing climate change. Burning fossil fuels and deforestation result directly in about 9 gigatons of carbon (GtC) emissions per year against the backdrop of the natural carbon flux -- emission and uptake -- of about 210 GtC per year to and from oceans, vegetation, soils and the atmosphere. But scientific research now indicates that humans are also impacting the natural carbon cycle through less-direct, but very important, mechanisms that are more difficult to monitor and control. I explore the challenges this presents to market or regulatory mechanisms that might be used to reduce greenhouse gases: scientific uncertainty about these indirect processes, pricing heterogeneous impacts of similar human behaviors, and the difficulty of assigning property rights to a far larger set of activities than has previously been contemplated. While this does not undermine arguments for market mechanisms to control direct anthropogenic release of greenhouse gases, it suggests that more research is needed to determine how and whether these mechanisms can be extended to address indirect human impacts. |
| JEL: | H23 Q54 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16104&r=reg |
| By: | Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Neustadt, Ilja (Socioeconomic Institute (SOI), Faculty of Economics, University of Zurich) |
| Abstract: | In a perfectly competitive market with a possibility of technological innovation we contrast guaranteed feed-in tariffs for electricity from renewables and tradable green certificates from a dynamic efficiency and social welfare point of view. Specifically, we model decisions about the technological innovation with convex costs within the framework of a game-theoretic model, and discuss implications for optimal policy design under different assumptions regarding regulatory pre-commitment. We find that for the case of technological innovation with convex costs subsidy policies are preferable over quota-based policies. Further, in terms of dynamic efficiency, no pre-commitment policies are shown to be at least as good as the pre-commitment ones. Thus, a government with a preference for innovation being performed if the achievable cost reduction is high should be in favor of the no pre-commitment regime. |
| Keywords: | Renewable Electricity; Feed-In Tariffs; Regulatory Pre-Commitment; Tradable Green Certificates; Quota Target; Innovation; Energy Policy |
| JEL: | Q42 Q48 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2010_004&r=reg |
| By: | Evan Calford (Centre for Energy and Environmental Markets, School of Economics, University of New South Wales, Australia); Christoph Heinzel (Centre for Energy and Environmental Markets (CEEM) School of Economics, Australian School of Business, University of New South Wales, Australia); Regina Betz (Centre for Energy and Environmental Markets, School of Economics, University of New South Wales, Australia) |
| Abstract: | We analyse the efficiency effects of the initial permit allocation given to firms with market power in both permit and output market. We examine two models: a long-run model with endogenous technology and capacity choice, and a short-run model with fixed technology and capacity. In the long run, quantity pre-commitment with Bertrand competition can yield Cournot outcomes also under emissions trading. In the short run, Bertrand output competition reproduces the effects derived under Cournot competition, but displays higher pass-through profits. In a second-best setting of overallocation, a tighter emissions target tends to improve permit-market efficiency in the short run. |
| Keywords: | Emissions trading, Initial permit allocation, Bertrand competition, EU ETS, Endogenous technology choice, Kreps and Scheinkman |
| JEL: | L13 Q28 D43 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1059&r=reg |
| By: | Olivier Deschenes |
| Abstract: | An important component of the debate surrounding climate legislation in the United States is its potential impact on labor markets. Theoretically the connection is ambiguous and depends on the sign of cross-elasticity of labor demand with respect to energy prices, which is a priori unknown. This paper provides some new evidence on this question by estimating the relationship between real electricity prices and indicators of labor market activity using data for 1976-2007. A key contribution of this analysis is that it relies on within-state variation in electricity prices to identify the models and considers all sectors of the U.S. economy rather than focusing only on the manufacturing sector. The main finding is that employment rates are weakly related to electricity prices with implied cross elasticity of full-time equivalent (FTE) employment with respect to electricity prices ranging from -0.16% to -0.10%. I conclude by interpreting these empirical estimates in the context of increases in electricity prices consistent with H.R. 2454, the American Clean Energy and Security Act of 2009. The preferred estimates in this paper suggest that in the short-run, an increase in electricity price of 4% would lead to a reduction in aggregate FTE employment of about 460,000 or 0.6%. |
| JEL: | J23 Q50 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16111&r=reg |
| By: | Mayank Wadhwa |
| Abstract: | Agricultural markets in India have been regulated since 1928 with the inception of the "Royal Commission of Agriculture." Policy intervention in agriculture was virtually absent till the Bengal Famine of 1943, in which more than a million people died. The famine provided a major impetus for formulation of a comprehensive food policy in India. The Food Policy Committee which was set up after the disaster, suggested an interventionist government policy in the food grain market. Intervention began in the form of administrative controls, monopoly procurement schemes and public distribution, but it now encompasses a wide array of restrictive tools. This was done on the premise that private trade would function efficiently in normal periods but in periods of drought and crop failure, the profit motive would lead them to hoard supplies and earn abnormal profits. Ever since, the Indian government has followed a policy of de-control and re-control of agricultural markets.Thus this paper talks about restrictions imposed on marketing and movement of agricultural goods in India.[Working Paper No. 0009] |
| Keywords: | Agricultural markets, Royal Commission, famine, food policy, comprehensive, disaster, encompasses, drought, crop failure, hoard supplies, agriculture, Bengal, famine, goods, India |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2569&r=reg |
| By: | Takeshi Iida (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University) |
| Abstract: | We investigate how environmental and trade policies affect the transfer of environmental technology in a two-country model with global pollution. By comparing free trade and tariff policy without commitment, the following results are obtained. First, the existence of an environmental policy in a local country induces technology transfer from a foreign country. Second, there is a possibility that free trade is preferable to a tariff policy for both countries even though free trade lowers the environmental tax rate. Third, the quantity of the local firmfs product decreases for higher environmental damage. On the other hand, import of environmentally efficient goods from the foreign country increases. |
| Keywords: | Environmental technology transfer; Free trade; Tariff protection |
| JEL: | D43 F13 L13 Q56 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1008&r=reg |
| By: | Robert T. Jensen; Nolan H. Miller |
| Abstract: | Many developing countries use food-price subsidies or price controls to improve the nutrition of the poor. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute towards foods with higher non-nutritional attributes (e.g., taste), but lower nutritional content per unit of currency, weakening or perhaps even reversing the intended impact of the subsidy. We analyze data from a randomized program of large price subsidies for poor households in two provinces of China and find no evidence that the subsidies improved nutrition. In fact, it may have had a negative impact for some households. |
| JEL: | I38 O12 Q18 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16102&r=reg |
| By: | Peter Wood (Resource Management in Asia-Pacific Program, Crawford School of Economics and Government, Australian National University) |
| Abstract: | This survey paper examines the problem of achieving global cooperation to reduce greenhouse gas emissions. Contributions to this problem are reviewed from non-cooperative game theory, cooperative game theory, and implementation theory. Solutions to games where players have a continuous choice about how much to pollute, games where players make decisions about treaty participation, and games where players make decisions about treaty ratification, are examined. The implications of linking cooperation on climate change with cooperation on other issues, such as trade, is examined. Cooperative and non-cooperative approaches to coalition formation are investigated in order to examine the behaviour of coalitions cooperating on climate change. One way to achieve cooperation is to design a game, known as a mechanism, whose equilibrium corresponds to an optimal outcome. This paper examines some mechanisms that are based on conditional commitments, and could lead to substantial cooperation. |
| Keywords: | Climate change negotiations; game theory; implementation theory; coalition formation; subgame perfect equilibrium |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1062&r=reg |
| By: | V. Kerry Smith |
| Abstract: | This paper considers the role of incentive based climate adaptation policies. It uses the early literature on pricing and capacity choices under demand uncertainty to describe how revised price structures for the substitutes for climate services can be treated as anticipatory adaptation. In many situations the policies determining the prices of these services make them difficult to adjust. Thus, excess demand will not be managed through price adjustment. This situation is important because it implies that the rationing rules determining who is served influence both capacity planning and pricing decisions. The lesson drawn from these models is that reform of pricing policy for climate substitutes offers a ready basis for incentive based adaptation policy. The last part of the paper offers some empirical evidence on how the price elasticity of the residential demand for water changes with variations in seasonal precipitation. The findings suggest marked differences between normal and dry conditions for the Phoenix metropolitan area. These results reinforce the need to co-ordinate changes in pricing policy with any capacity planning developed for water supplies as part of anticipatory climate adaptation. Similar relationships may well apply for other substitutes for climatic services. |
| JEL: | Q4 Q54 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16100&r=reg |
| By: | Clark, Andrew E. (Paris School of Economics); Milcent, Carine (Paris School of Economics) |
| Abstract: | This paper uses an unusual administrative dataset covering the universe of French hospitals to consider hospital employment: this is consistently higher in public hospitals than in Not-For-Profit (NFP) or private hospitals, even controlling for a number of measures of hospital output. NFP hospitals serve as a benchmark, being very similar to Public hospitals, but without political influence on their hiring. Public-hospital employment is positively correlated with the local unemployment rate, whereas no such relationship is found in other hospitals. This is consistent with public hospitals providing employment in depressed areas. We appeal to the Political Science literature and calculate local political allegiance, using expert evaluations on various parties’ political positions and local election results. The relationship between public-hospital employment and local unemployment is stronger the more left-wing the local municipality. This latter result holds especially when electoral races are tight, consistent with a concern for re-election. |
| Keywords: | hospitals, public employment, unemployment, political preferences |
| JEL: | D21 D72 I18 J21 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4994&r=reg |
| By: | Reuven Glick; Michael Hutchison |
| Abstract: | We investigate the effectiveness of capital controls in insulating economies from currency crises, focusing in particular on both direct and indirect effects of capital controls and how these relationships may have changed over time in response to global financial liberalization and the greater mobility of international capital. We predict the likelihood of currency crises using standard macroeconomic variables and a probit equation estimation methodology with random effects. We employ a comprehensive panel data set comprised of 69 emerging market and developing economies over 1975–2004. Both standard and duration-adjusted measures of capital control intensity (allowing controls to "depreciate" over time) suggest that capital controls have not effectively insulated economies from currency crises at any time during our sample period. Maintaining real GDP growth and limiting real overvaluation are critical factors preventing currency crises, not capital controls. However, the presence of capital controls greatly increases the sensitivity of currency crises to changes in real GDP growth and real exchange rate overvaluation, making countries more vulnerable to changes in fundamentals. Our model suggests that emerging markets weathered the 2007-08 crisis relatively well because of strong output growth and exchange rate flexibility that limited overvaluation of their currencies. |
| Keywords: | Financial crises ; Capital market ; Emerging markets ; Econometric models ; Panel analysis |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2010-15&r=reg |
| By: | John Rolfe (Faculty of Business and Informatics at Central Queensland University y); Jill Windle (Faculty of Business and Informatics at Central Queensland University) |
| Abstract: | In this paper the results of a choice modelling experiment to value increased protection of the Great Barrier Reef in Australia is reported. There are very few previous studies that identify protection values for the Great Barrier Reef, making it difficult to evaluate whether the community benefits from future additional protection measures are larger than the costs involved. The valuation experiment that has been conducted is novel in two important ways. First, different management policies to increase protection have been included as labels in the choice experiment to test if the mechanisms to achieve improvements are important to respondents. Second, the level of certainty associated with predicted reef health has been included as an attribute in the choice profiles, helping to distinguish between outcomes of different management policies. The results show that protection values vary with the policy scope of the improvements being considered. Values are sensitive to whether protection will be generated by improving water quality entering the reef, increasing conservation zones or reducing greenhouse gas emissions, and the level of certainty of outcomes. The average household willingness to pay for five years for each additional 1% of protection is approximately $26.37 when the broad management options to generate improvements were included in the choice sets. These results can be extrapolated to a total value held by Queensland households of $132.8M to $171.5M per 1% improvement, depending on the assumptions used about the discount rate. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1057&r=reg |
| By: | Charles Figuières; Solenn Leplay; Estelle Midler; Sophie Thoyer |
| Abstract: | Bioprospection is, largely, meant to help reducing deforestation and, the other way around, stopping deforestation enhances the prospects of bioprospection. The need for a global agreement to the problem of tropical deforestation has led to the REDD (Reducing Emissions from Deforestation and Degradation) scheme, which proposes that developed countries pay developing countries for CO2 emissions saved through avoided deforestation and degradation. The remaining issue at stake is to definer the rules defning payments to countries reducing their deforestation rate. This article develops a game-theoretic bargaining model, simulating the on-going negotiation process which is currently taking place within the Convention of Climate Change, after the Copenhagen agreement of December 2009. It shows that the conditions under which developing countries are left to bargain over the allocation of the global forest fund may lead to an ineffective system of incentives. Below a given level of contributions from the North, the mechanism fails to curb the deforestation. Beyond this level, it induces perverse effects: the larger the North's contribution, the larger the deforestation rate. Consequently, the mechanism is most effective only at a specifc threshold level which, given the unobservability of countries'preferences, can only be found by a repeated "trial and error" implementation process. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:10-06&r=reg |
| By: | Robert P. Inman |
| Abstract: | The 2007-2010 recession has imposed significant fiscal hardships on state and local governments. The result has been state deficits and the need to increase state taxes, cut spending, and withdraw funds from state rainy day accounts. The primary cause of state budget “gaps” has been the rise in the level of state unemployment. There is no evidence that gaps are related to state political institutions, the state’s prior receipt of federal funding, or possibly favored access to key congressional budget committees. The federal government has responded to these gaps with the passage of the American Recovery and Reinvestment Act (ARRA) of 2009 intended to aid states in fiscal distress and to provide an economic stimulus. As insurance for fiscal distress, ARRA covers at most $.23 of each additional dollar of a state’s budget gap; there is a large per capita payment that goes to all states, independent of the level of state deficits. As targeted assistance for stimulating local economies, ARRA funding is uncorrelated with state unemployment rates. ARRA funding appears to be decided by congressional politics, given the desire to pass a major spending and tax relief package as quickly as possible. States are important “agents” for federal macro-policy, but agents with their own needs and objectives. |
| JEL: | H71 H77 H81 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16086&r=reg |
| By: | Konrad Stahl (University of Mannheim); Roland Strausz (Humboldt-University at Berlin) |
| Abstract: | Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer --- the seller --- follows from a non--trivial analysis revealing a clear intuition. Buyer--induced certification acts as an inspection device, whence seller--induced certification acts as a signalling device. Seller--induced certification maximizes the certifier's profit and social welfare. This suggests the general principle that certification is, and should be induced by the better informed party. The results are reflected in a case study from the automotive industry, but apply also to other markets -- in particular the financial market. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:323&r=reg |
| By: | Daniel S. Holland |
| Abstract: | Fisheries management is complicated in nearly all cases by a high degree of uncertainty about the current state and expected growth of fish stocks and about the economic and social factors that affect the desirable harvest levels. Even for fisheries with excellent data collection programs, scientific surveys and sophisticated assessments, the estimates of catch levels that will maintain healthy fisheries or rebuild depleted ones are often far from accurate. Consequently recommended catch levels often fluctuate more than necessary in response to error in assessments rather than true stock variability and frequently react too slowly due to lags in data collection, assessment and implementation. Overly optimistic estimates of stock size and future growth have often led to allowing catch levels that undermine rebuilding. Fishery management strategies also rarely include specific objectives developed with stakeholder involvement which can undermine stakeholders‘ support for conservation even when it may be in their best interest. In this paper I discuss an approach for evaluating and implementing fishery management strategies known as management strategy evaluation (MSE), also sometimes referred to as the management procedure (MP) approach that is designed to identify and operationalise strategies for managing fisheries that are robust to several types of uncertainty and capable of balancing multiple economic, social and biological objectives. When implemented correctly an MSE should result in clear and measurable objectives and a robust process for achieving them that fishery managers and stakeholders have jointly developed and agreed to. I review several examples of MSEs that have been used to evaluate, and in some cases implement, rebuilding strategies for overfished fisheries. These case studies demonstrate how the MSE approach has been applied and some of its advantages and limitations |
| Keywords: | Management Strategy Evaluation, Fisheries Rebuilding, Fisheries Economics, South African Hake, New Zealand Rock Lobster, Fisheries management |
| Date: | 2010–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:25-en&r=reg |