Fisheries continue to be among the best examples of the tragedy of the commons in action. As Garrett Hardin himself noted in his 1968 essay, "the oceans of the world continue to suffer" from the dynamic of the commons. Alas, little has changed. Ocean fisheries remain in trouble, as study after study reveals. Most fisheries around the globe are fully or over-exploited, and a substantial number have already faced collapse. The problem with fisheries management runs deep.
It would be nice to think this is a problem confined to poor or developing countries, but it's not. Dozens of fish stocks in the United States remain overfished, despite herculean efforts to impose meaningful fishery regulations, from total catch limits to restrictions on fishing gear other inputs. Such measures try to limit access, but they do not alter the fundamental incentives of the commons. Each participant in the fishery retains every incentive to get what he or she can, even at the expense of the whole. In many fisheries, we see this manifested in a destructive and wasteful "race to catch," as each boat tries to get what it can before the fishery reaches its catch limit and closes. The resulting practices may make for good reality television, but they don't foster sound ecological stewardship. Traditional regulatory strategies do little to encourage concern among resource users for the long-term health of the resource and pit resource users against conservation interests.
It does not have to be this way. Even before Hardin wrote his essay fishery economists had diagnosed the problem and explained how property rights in fisheries could solve the problem. Specifically by recognizing property rights in a percentage of the catch for a given species (or, in some cases, by recognizing rights in fishing territories), the "race to catch" could be eliminated and fishing crews could be given an incentive to husband the resource. The creation of property rights in the underlying resource aligns the incentives of those who work in the fishery with the health of the fishery. As owners of a share in the catch year-after-year, the fishers have a stake in ensuring there are more fish tomorrow than there are today.
The benefits of such a system are not merely theoretical. They have now been confirmed through extensive empirical research. A recent study in Science that looked at over 11,000 fisheries over a fifty year period found clear evidence that the adoption of property-based management regimes, often called "catch shares" or ITQs, prevents fishery collapse. (More here.) This is only the latest piece of evidence supporting the use of property institutions for fishery conservation. As Hardin predicted, the institution of property rights averts the tragedy of the commons.
There are many reasons for this. The creation of property rights in an ecological resource not only creates incentives for greater resource stewardship, to conserve the underlying value of the resource today and into the future. It also gives those who rely upon the resource a stake in the broader set of institutions that govern the resource.
Under traditional fishery management, those who fish and those who regulate are typically at odds. Fishermen lobby for less restrictive catch limits so they may catch more today, out of fear the fishery may be more constrained tomorrow. Interestingly enough, the creation of property rights in the fishery catch encourages fishermen to take the opposite tack. More precautionary catch limits actually enhance the value of their catch shares, so they seek more protective policies. In some cases, as has been observed in New Zealand, fishery share owners themselves effectively take over the management of the stock, enforcing catch shares and limits, policing restrictions on by-catch, and funding the research necessary to ensure the fishery maintains its maximum sustainable yield over time.