Rent creation and distribution-Theory and the Vietnamese small scale purse seine fishery

Abstract

In Vietnam, as in many other countries, the fisheries sector plays an important role in securing food, providing livelihood, and promoting economic development. Vietnamese fisheries are characterized by open access, and the number of fishing vessels has increased tremendously over the past years while the harvest growth has slowed down. This seems to indicate that the fisheries have reached the limit on the growth, and that overfishing in near-shore waters may be imminent. Overfishing has become an important issue for governments and organizations in all coastal states in recent years. Sustainability is now stated as an overriding policy objective. The concept of sustainable development makes clear that environmental, economic and social goals must be met simultaneously. Hence, in the management process, both environmental well-being and human well-being must be taken into consideration. The central topic of this thesis is how and to what extent open-access fisheries may be consistent with or opposed to the goals of sustainable development. It is obvious that open-access fisheries may contradict the goal of environmental well-being. However, it is more unclear what an open-access regime does mean for the goal of human well-being. In the literature, it is generally assumed that the economic rent will disappear because of the common property problem. This thesis questions this assumption and takes a closer look at the processes of rent creation and distribution, and how these may affect environmental sustainability. The main concerns of the three papers are the following: Paper 1 examines if rent can be generated and distributed in open-access fisheries by looking at the way fishermen formulate remuneration contracts. This issue is also discussed in paper 2, but in light of how the fishermen link with downstream markets when fish is traded internationally. Here, the effects of different market structures are highlighted. Both papers 2 and 3 deal with the linkage between the fishermen and the resources, which is an important issue from the point of view of environmental sustainability The analytical framework applied in this thesis is presented in the model of the fishery system. This model emphasizes the relationship between the human system and the environment, and the complex interplay between the various components of the fishery system (resources, fishermen, community, market, and state). The theoretical models employed vary from general economic theories applicable to many different fields (principal-agent theory, expected utility theory, theories of market structures) to theories relating particularly to fisheries (the biological overfishing model, the backward bending supply curve in open-access fisheries. Various methodological techniques are also included (propensity score matching, autoregressive model, weight and constrained least square). In all three papers, theoretical discussions and empirical findings are combined. The data is from Vietnam – mainly related to the inshore anchovy purse seine fishery. In addition, data from the offshore yellow fin tuna longline fishery is used in order to compare how different the results are between offshore and inshore fisheries. This thesis shows that rent creation and distribution can be achieved in open-access fisheries, and that the existence of market power by middlemen to some extent can limit the overfishing problem. Hence, market power is not necessarily a failure. It also turns out that economic data might be applied to measure the problem of overfishing and the health situation of the resource if biological data is lacking. A more interdisciplinary approach, including behavior models and a holistic concept of the fishery system, could allow for an improvement of today’s fisheries management. This thesis has particularly pointed out the importance of taking the fishermen’s decision-making behavior into account. This is an issue which so far has not received much attention in the literature on fisheries management.