Evaluating the New Zealand individual transerable quota market for fisheries management

Inshore fisheries depletion, the development of the quota-based programme for offshore fisheries, and the general orientation of the New Zealand government in the 1980s toward deregulation, combined to create an atmosphere conducive to fundamental change in New Zealand fisheries management. After several years of consultation with industry, the Fisheries Amendment Act of 1986 was passed, creating New Zealand's individual transferable quota (ITQ) system. Modifying legislation has been passed several times since, but the basic structure of the system has remained intact. The system has been evaluated many times since its inception. Most evaluations have been qualitative in nature with the emphasis on identifying problems and improving the design of the regulations. The state of the fish stocks is reviewed regularly, though significant uncertainty remains. This report presents results from the first systematic assessment of the economic efficiency of the system. We assess only the likely cost efficiency of the ITQ market. We do not assess the environmental effects of the system and hence cannot comment on the overall economic efficiency of the regulation. We begin by giving a brief description of the ITQ system. We then discuss our motivation and the institutional framework for the evaluation. We discuss our methodology and basic results and then compare these with other evaluations of ITQ fisheries programmes and some other economic research on the New Zealand system.

Duke Scholars

Author Richard G. Newell Environmental Sciences and Policy