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A corporate-crime perspective on fisheries: liability rules and non-compliance

Published online by Cambridge University Press:  18 September 2015

Frank Jensen  and
Linda Nøstbakken
Frank Jensen
Affiliation:
University of Copenhagen, Department of Food and Resource Economics, Rolighedsvej 23, 1958 Frederiksberg C., Copenhagen, Denmark. Tel: 0045 35336898. E-mail: fje@ifro.ku.dk
Linda Nøstbakken
Affiliation:
Norwegian School of Economics, Department of Economics, Bergen, Norway. E-mail: Linda.Nostbakken@nhh.no
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Abstract

The existing fisheries economics literature analyzes compliance problems by treating the fishing firm as one cohesive unit, but in many cases violations are committed by agents acting on behalf of a firm. To account for this, we analyze the principal–agent relationship within the fishing firm. In the case where the firm directly benefits from illegal fishing, the firm must induce its crew to violate regulations through the incentive scheme. Within this framework, we analyze how the allocation of liability between fishing firms and crew affects quota violations and the ability to design a socially efficient fisheries policy. We show that without wage frictions, it does not matter who is held liable. However, under the commonly used share systems of remuneration, crew liability generally yields a more efficient outcome than firm liability. Furthermore, asset restrictions may affect the outcome under various liability rules.

Type
Research Article
Information
Environment and Development Economics , Volume 21 , Issue 3 , June 2016 , pp. 371 - 392
Copyright
Copyright © Cambridge University Press 2015 

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