Taking Institutions Seriously:

Master of Public Administration Program

Taking Institutions Seriously:Using the IAD Framework to

Analyze Fisheries PolicyMark T. Imperial, Ph.D.

Master of Public Administration ProgramUniversity of North Carolina at Wilmington

Wilmington, NC [email protected]

Tracy Yandle, Ph.D.Department of Environmental

StudiesEmory UniversityAtlanta, GA [email protected]://people.uncw.edu/imperialm/index.htm


Central Arguments• Fisheries literature basically argues that there are 4

general approaches– Bureaucracy-based, market-based, community-based, co-management– Mirrors the 4 approaches used in environment and natural resources

• Little cross-fertilization of ideas and lack of knowledge accumulation– Lack of good comparative analysis– Problems with the institutional analysis

• Improved fisheries management requires paying greater attention to institutional design and performance– IAD framework developed by Elinor Ostrom and her colleagues may be

of some use, but others exist


Competing Approaches to Fisheries Management

• Bureaucracy-Based (Leviathan)– Default position: centralized government control by regulating fishing

activities

– It tends to be widely criticized even though it remains a dominant approach

• Market-Based (ITQs)– Involves setting a total allowable catch (TAC) and allocating it to

fishers via individual tradable quotas (ITQs)

– Improves economic efficiency and productivity

– Resource economists often favor this approach

– Has seen growing use since the 1980s around the world


Competing Approaches to Fisheries Management

• Community-Based– More eclectic: goes by names such as folk management and self-

governance

– Focuses on fisheries communities regulating themselves

– Few critiques of this approach and a tendency to “romance the commons”

• Co-Management– In last decade it has emerged as its own approach and goes by names

such as cooperative management or stakeholder group management

– Hybrid arrangement that borrows aspects of the other three approaches

– Emphasis is on shared management between government and user groups


Bureaucracy-Based Approaches• Emphasis

– Stock protection and maintaining fisheries at sustainable levels using a standard set of rules

• Competing objectives– Conservation, resource maintenance, administrative efficiency,

accountability

• Resource ownership– Property rights held by government

• Policy Tools– Focus tends to be on the input side

– Licenses, gear restrictions (trawls, mesh size, etc.), seasonal restrictions, closures, size limits, limited entry, TAC, etc.


Market-Based Approaches• Emphasis

– Wealth generation for the fishing industry

• Competing objectives– Market efficiency, productivity, resource maintenance, accountability

• Resource ownership– Property rights allocated through ITQs to vessel owners/fishers

• Policy Tools– Focus tends to be on the output size

– Using ITQs to allocate either % of TAC or tonnage


Community-Based Approaches• Emphasis

– Community control over a fishery

• Competing objectives– Fisher control, community welfare, distributional equity, other

social/cultural benefits, resource conservation

• Resource ownership– Property rights held by a community or a group of individuals within a

community

• Policy Tools– Focus can be either on inputs or outputs

– Gear limits, seasonal restrictions, location restrictions, rotating pressure, ownership of specified fishing grounds


Co-Management• Emphasis

– Shared management between government and user groups

• Competing objectives– Shared decision making, greater fisher control, better information

gathering, resource maintenance, reduced government costs

• Resource ownership– Varies: property rights are usually held by government with some

rights delegated to user groups

• Policy Tools– Focus is on either inputs or outputs

– Tools are a combination of those used by the other three approaches


Different Definitions of Success• Bureaucracy-based approach

– Rules limit the total catch such that the maximum sustained yield (MSY) is not exceeded

• Market-based approach– Quota is set such that the MSY is not exceeded and the market

operates to efficiently allocate the catch

• Community-based approach– Community maintains the fishery at a socially and biologically viable

level

• Co-management– Government and user groups maintain fishery at a viable level at lower

costs to government and fishers


Potential Positive OutcomesBureaucracy-

BasedMarket-Based Community-

BasedCo-

Management

• Central govt. control over resources

• Resource protection

• Rule stability

• Low adm. costs

• Account. - rules

• Equitable

• Can preserve small fishers

• Econ. efficiency

• Higher incomes for fishers

• Avoids capital stuffing & derbies

• Stock conserv.

• Account. – ITQs

• Fleet/industry modernization

• Stability for fishers

• Locally managed

• Fisher control

• Preserves comm. values

• Preserves small fishers/producers

• Often minimal envtl. impacts

• Rules often fit local conditions

• Reduced cheating

• Fishers involved in management

• Better information

• Reduced role for govt.

• Rules often fit local conditions

• Reduced mgt. costs

• Reduced cheating


Potential Negative OutcomesBureaucracy-

BasedMarket-Based Community-

BasedCo-

Management

• Rent-seeking - regs.

• Agency capture

• Inefficient

• Capital stuffing and derbies

• High adm. costs for monitoring

• Lack of adaptability

• Scientific uncertainty

• Rent-seeking - ITQs

• Agency capture

• Equity problems

• Loss of small fishers & ind. consolidation

• Admin. costs

• Loss of community

• Scientific uncertainty

• Capture by comm. leaders

• No external acct.

• Economically inefficient

• Unsafe practices

• Does not adjust to dramatic changes in technology, stock, or culture

• Industry capture

• Unwillingness to reduce catch

• Difficult for noncommercial interests to part.

• Insufficient govt. oversight

• Lack of voice for small fishers

• Lack of mgt capacity


Taking Institutions Seriously• Policy objectives can be reached in many different

ways– But many analysts base their choices on the technical properties

• Objective is to understand the comparative advantage of competing approaches given differing goals, values, and contextual factors– Instruments are not value neutral and often have distributional impacts

– Performance often depends less on a policy’s formal properties and more on the political and administrative context it operates within

• Institutional arrangements, rather than abstract theory, tends to shape policy results


What is institutional analysis?• Institutions

– Enduring regularities of human action in situations shaped by rules, norms, and shared strategies as well as the physical world

– Includes families, churches, governments, and most other forms of organization

• Institutional analysis– Differs from other types of analysis because of its focus on rules

• Rules– Prescriptions that forbid, permit, or require some action or outcome and

the sanctions authorized if the rules are violated

– Formal: laws, policies, regulations, etc.

– Informal: social norms


What is Bad Institutional Analysis?• Bias for success stories

– Too much “wisdom” literature that can be systematic but is not theoretical, based on empirical data, or uses frameworks

– Need more theory seeking research that strives towards generalization

• Faulty lesson drawing– Analyst blindly assumes an approach that works well in one setting

will work in others

– Need to identify the contextual factors that influence performance or transferability of an approach

• Falling victim to cognitive bolstering– Exaggerate favorable consequences while minimizing negative ones

– Fisheries analyst recites a long parade of horribles about other approaches to justify the one they advocate


What is Bad Institutional Analysis?• Single institutionalism mindset

– Analyst focuses on examining the variation in performance of a single institutional arrangement

– Ignores the possibility that another approach could achieve the same objective at less cost

• Ignoring important transaction costs– Performing a truncated analysis that fails to consider the full range of

transaction costs

• Using limited criterion to assess institutional performance– Need to use a wide range of criterion

• Failing to use conceptual frameworks to guide analysis– Need to focus on knowledge accumulation and systematic analysis


Action Arena• Is your unit of analysis

• Includes the fishery and the community affected by the rules used to govern the fishery– Fishers, captains, vessel owners, buyers, processors, distributors,

regulators, and the community that the individuals live in, including the individuals/organizations that provide services to the actors

• Problem occurs when the analyst focuses on the relationship between the regulator and fishers thus ignoring other impacts


Contextual Setting• Physical Setting

– Rules governing a resource must be compatible with the underlying physical setting and the nature of the resource being managed

• Attributes of the Community (Culture)– Variables such as the norms of behavior, level of common

understanding, homogeneity of individual resources, and the distribution of resources within the community

– It also includes the political and socioeconomic environment

• Existing Institutional Setting– Institutional change tends to be incremental and path dependent

rather than totally reconstructive or destructive

– Need to understand how the institutional arrangement works now to design effective changes


Transaction Costs• Information Costs

– Ineffective blend of scientific and time and place information

– Scientific: acquired by individuals through education or experience about the regularities of relationships between key variables rather than how they function in a specific context

– Time & Place: Knowledge abut a particular physical and social setting

• Coordination Costs– Those invested in negotiating, monitoring, and enforcing agreements

• Strategic Costs– Result from asymmetries of information, power, or other resources that

allow some to obtain benefits at the expense of others

– Rent-seeking, free-riding, shirking, social loafing, corruption, collusion, turf-guarding


Assessing Overall Institutional Performance

• Efficiency– Market: What effect does the institutional arrangement have on the

market with respect to wealth generation or productivity?

– Administrative: What are the administrative costs associated with this arrangement compared to others?

• Equity– Fiscal equivalence: Do those who derive greater benefits pay more?

– Redistributional: Is the program structured around differential abilities to pay? Equality of the process is also as important as the equality of results.


Assessing Overall Institutional Performance

• Accountability: – Accountability is an important principle in any democratic society

– Internal vs. external

– Informal vs. formal

• Adaptability– Unless institutional arrangements have the capacity to respond to their

changing environment and new information, institutional performance will suffer

– Adaptive management is often a preferred approach in managing natural resources


Institutional Performance vs. Policy Outcomes

• Desired policy outcomes ≠ good institutional performance

• You can have a bad policy coupled with good institutional performance and decimate a fisher in short order

• You can have poor institutional performance but the policy is effective enough to maintain stocks at desired levels

• Worst case: bad policy that destroys a fishery in the most inefficient way possible

• Best case: an effective policy that achieves its results with low transaction costs and satisfies the outcome criteria of interest to decisionmakers


Summary & Conclusions• Developing a well-designed governance system is at

least as important as conducting good science and designing effective policies

• Fisheries analysts would be wise to recognize that no single form of organization is presumed to be “good” for all circumstances

• Institutional analysis should also remain focused on trying to determine which institutional arrangement works best in particular settings– It involves much more than designing some theoretically optimal

policy


Summary & Conclusions• Analyst job is to clarify and define problems and

help decisionmakers identify appropriate goals, objectives, and values that they seek to understand– Understand how programs work in practice– Who benefits and loses– How the program changes incentive structures– How the program can be improved or discontinued– Is the program accomplishing what was intended in the way it was

intended

• Our hope is that better theory-driven/empirical research will provide better information for decisionmakers– Presumably this will improve our chances of developing more

effective fisheries management programs


Questions?

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