The role of path–dependent institutions during the collapse and rebuilding of a fishery

Abstract

This article presents a historical analysis of the Norwegian spring spawning herring fishery. Theoretically, the study is rooted in new institutional economics (NIE). The study shows that the fishery collapsed during the 1960s because of overfishing. The underlying key drivers were unregulated open access management, technological progress, and excess capacity building. The analysis further discloses that the initial responses to the resource crisis exacerbated the underlying issues; subsidies introduced to support a fishing fleet that was not adapted to the catch base. Also, fishing for juvenile herring was allowed to protect the income of the fishers. The study argues further that the breakdown of the herring fishery represented a historical event that marked a paradigm shift from open access to closed entry fisheries management. The building of formal institutions supported the turnaround in the management path. In the aftermath of the crisis, the fishery was closed, total allowable catch regulations (TACs) were introduced, and individual vessel quotas followed a few years later. During the 1990s, the stock recovered, and herring reemerged as a key revenue driver for the pelagic fleet. Finally, some economic effects for the pelagic vessels brought about by the changed management path are outlined in the paper.