Explain the potential pitfalls of using a command and control strategy to overcome the tragedy of the commons. Why is it so hard to create rules that have a lasting ability to control overfishing? New Zealand created a system of Individual Transferable Quotas that limits the number of tons of fish that can be caught in a given year. Explain how a system that limits the number of fish that a fisherman is allowed to catch can end up increasing the total number of fish that each fisher can catch.
Tragedy of commons theory suggests that the unregulated fishing which is free for all for the limited stock to make the personal gains will lead to depletion of the stock and then collective loss due to unavailability of that natural resources .
In case of Fisheries, when a new fishery is discovered, every fisherman will like to take the advantage of the free access to the fishing anf gain extra ordinary profit. However there will come a point where everyone will like to do the same and over use the resource leading to its depletion ultimately. And this problem , when the personal rational decision turn out to be collective irrational decision is termed as tragedy of commons.
This forms a case of Prisoner’s dilemma, where for each player, the don’t copperat strategy strictly dominates the cooperate strategy for each player, but exercising it will lead them to the lowest possible pay off. If they do notcopperate, overfishing will deplete the resource. If one of them cooperate, he will be at loss and if both cooperate, they both can get the second best result Therefore the exercising the command and control policy in this case will lead to the less than normal pay off.
To draw a rule to stop the overfishing problem is difficult in this case. This is because, a the fishery resource is held in common, with many fisherman having the ownership, however at the same time, the self interested rational owner will exploit the resource and the cost will be divided among all the users. Therefore this tragic result of each person thinking in the sam way will destroy the benefit of all.
In NewZealand, introduction of the ITQ’a lead to the consolidation of the fishing rights to the big companies. This lead to the limited or no owener ship to the small fisher man. This resulted in the job loss and decreased opportunity of fishing to the fishery. At the same time, the big firms overly used the fisheries for their own private use leading to over utilization of the resources.