ABSTRACT
This chapter explores the role of economics in designing well-managed fisheries. It examines what is meant by an efficient and sustainable level of harvest and discusses whether efficiency is a sufficiently strong criterion to avoid extinction. The chapter considers how the process of fisheries management could be reformed to improve both efficiency and sustainability. Commercially exploited biological resources can become depleted to the point of extinction if the population is drawn down beyond a critical threshold. The new static efficient sustainable yield equilibrium implies more annual effort, a lower population level, a larger annual catch, and a higher net benefit for the fishery. The effect of a positive discount rate for the management of a fishery is similar to its influence on the allocation of depletable resources–the higher the discount rate, the higher the cost to the resource owner of maintaining any given resource stock.
