The Political Game of European Fisheries Management

Abstract

European fisheries activities are subject to a hierarchy of regulatory authorities. This raises questions regarding the implications of strategic interaction between different authority levels concerning the regulation of these activities. We apply a bio-economic objective function where fishers and regulators have environmental, economic and social preferences, and where fishers are subject to the aggregate of the regulations set by the various authorities. We analyse one situation where EU authorities set their regulation first, followed by national authorities’ regulation, and one situation where the two regulators set their regulations simultaneously. Using data from a survey on preferences among fisheries stakeholders combined with data from the UK nephrops fisheries, this study shows that a hierarchy of regulators with similar preferences will yield higher unit regulations, i.e. higher taxes or higher subsidies than a situation with one regulating authority. When regulators have unequal preferences we may get a situation where one regulator induces a tax on effort, whereas the other offers a subsidy. In this situation the aggregate unit regulation becomes uncertain.

Appendix

1.1 Regulators Moving Sequentially

Taking the derivative of $\hbox {U}^{EU}$ in (10) w.r.t. E yields the optimal effort for the EU authorities, which is

$$\begin{aligned} E_{EU}^{S*} =\frac{r\left[ {qK\left( {\varGamma ^{EU}+\lambda \varGamma ^{F}} \right) -Q^{EU}-\lambda Q^{F}-\lambda w_1^*+\frac{\varGamma ^{N}+(1-\lambda )\varGamma ^{F}}{\varGamma ^{N}+\varGamma ^{F}}v_1^S } \right] }{2q^{2}K\left( {\varGamma ^{EU}+\lambda \varGamma ^{F}} \right) } \end{aligned}$$

(22)

The optimal effort level for the national authorities is found by maximising $U^{N}$ w.r.t. E, and given (11), and is given by

$$\begin{aligned} E_N^{S*} =\frac{r\left[ {qK\left( {\varGamma ^{N}+\lambda \varGamma ^{F}} \right) -Q^{N}-\lambda Q^{F}\mp \left( {1-\lambda } \right) t_1^S -\lambda v_1^S } \right] }{2q^{2}K\left( {\varGamma ^{N}+\lambda \varGamma ^{F}} \right) } \end{aligned}$$

(23)

And the optimal effort for the fishers, given two regulators is

$$\begin{aligned} E_F^{**} =\frac{r\left[ {qK\varGamma ^{F}-Q^{F}-v_1^S -t_1^S } \right] }{2q^{2}K\varGamma ^{F}} \end{aligned}$$

(24)

Equalising (22) and (24) yields (13) and equalising (23) and (24) yields (14).

The explicit expressions for the optimal regulations are

$$\begin{aligned} v_1^{S*}&= -\frac{\varGamma ^{EU}\left( {\Gamma ^{N}+\varGamma ^{F}} \right) }{\varGamma ^{F}\left( {\Gamma ^{EU}+\Gamma ^{N}+\varGamma ^{F}}\right) }w_1^*+\frac{\left( {\Gamma ^{N}+\varGamma ^{F}} \right) \left( {Q^{EU}\Gamma ^{F}-\hbox {Q}^{F}\varGamma ^{EU}} \right) }{\varGamma ^{F}\left( {\Gamma ^{EU}+\Gamma ^{N}+\varGamma ^{F}} \right) }\end{aligned}$$

(25)

$$\begin{aligned} t_1^{S*}&= \frac{\left( {\varGamma ^{N}+\varGamma ^{F}} \right) \left( {\varGamma ^{EU}+\varGamma ^{F}} \right) }{\varGamma ^{F}\left( {\Gamma ^{EU}+\Gamma ^{N}+\varGamma ^{F}}\right) }w_1^*-\frac{\Gamma ^{N}\left( {Q^{EU}\Gamma ^{F}-\hbox {Q}^{F}\varGamma ^{EU}-\varGamma ^{EU}w_1^*} \right) }{\varGamma ^{F}\left( {\Gamma ^{EU}+\Gamma ^{N}+\varGamma ^{F}}\right) } \end{aligned}$$

(26)

1.2 Regulators Moving Simultaneously

The national authorities’ optimisation problem in the case of two regulators is now

$$\begin{aligned}&maxU^{N}=\beta _1^N \textit{PqKE}\left( {1-\frac{qE}{r}} \right) +\beta _2^N \left( {\textit{pqKE}\left( {1-\frac{qE}{r}} \right) -aE} \right) \nonumber \\&\quad \,+\,\beta _3^N SE+\rho \left( {t_0^C +t_1^C E} \right) .\end{aligned}$$

(27)

$$\begin{aligned}&\hbox {s.t}.\quad \beta _1^F PqKE\left( {1-\frac{qE}{r}} \right) +\beta _2^F \left( {\textit{pqKE}\left( {1-\frac{qE}{r}} \right) -aE} \right) \nonumber \\&\quad \,+\beta _3^F SE-\left( {t_0^C +t_1^C E} \right) -\left( {v_0^C +v_1^C E} \right) \ge 0\end{aligned}$$

(28)

$$\begin{aligned}&{\dot{X}}\equiv [F(X)-h(E,X)]=0 \end{aligned}$$

(29)

were we have kept the same share of the regulation revenue to national authorities, $\uprho$, as in the previous examples.

Taking the derivative of $\hbox {U}^{N}$ w.r.t. E yields the optimal effort for the national authorities, which is

$$\begin{aligned} E_N^{C*} =\frac{r\left[ {qK\left( {\varGamma ^{N}+\lambda \varGamma ^{F}} \right) -Q^{N}-\lambda Q^{F}+(1-\lambda )t_1^C -\lambda v_1^C } \right] }{2q^{2}K\left( {\varGamma ^{N}+\lambda \varGamma ^{F}} \right) } \end{aligned}$$

(30)

The optimal effort level for the EU authorities is given by

$$\begin{aligned} E_{EU}^{C*} =\frac{r\left[ {qK\left( {\varGamma ^{EU}+\lambda \varGamma ^{F}} \right) -Q^{EU}-\lambda Q^{F}+(1-\lambda )v_1^C -\lambda t_1^C } \right] }{2q^{2}K\left( {\varGamma ^{EU}+\lambda \varGamma ^{F}} \right) } \end{aligned}$$

(31)

And the optimal effort for the fishers, given two regulators is

$$\begin{aligned} E_F^{**} =\frac{r\left[ {qK\varGamma ^{F}-Q^{F}-v_1^C -t_1^C } \right] }{2q^{2}K\varGamma ^{F}} \end{aligned}$$

(32)

The explicit expressions for the optimal regulations when there are two regulators are:

$$\begin{aligned} t_1^{C*}&= \frac{Q^{N}\varGamma ^{EU}-Q^{EU}\varGamma ^{N}+Q^{N}\varGamma ^{F}-Q^{F}\varGamma ^{N}}{\left( {\Gamma ^{EU}+\Gamma ^{N}+\varGamma ^{F}} \right) }\end{aligned}$$

(33)

$$\begin{aligned} v_1^{C*}&= \frac{Q^{EU}\varGamma ^{N}-Q^{N}\varGamma ^{EU}+Q^{EU}\varGamma ^{F}-Q^{F}\varGamma ^{EU}}{\left( {\Gamma ^{EU}+\Gamma ^{N}+\varGamma ^{F}} \right) } \end{aligned}$$

(34)