Poverty Environment Partnership
Reports and Articles
Implementing fishery fiscal reform may be a difficult exercise. One of the reasons why economists have often rejected tax-based approaches to fisheries management is because of the apparent political difficulties that they would entail despite their undoubted attraction from a purely economic viewpoint (Munro, 1993). There are increasing signs however that countries, particularly developing ones, are managing to overcome these difficulties (e.g. Vetemaa et al, 2002). This paper considers some of the political economy aspects to fiscal reform in fisheries.
Assuming that fisheries can be managed in such a way as to generate their implicit wealth (resource rents), this paper discusses what might be done with such rents. Decisions on such usage must in practice emerge from the political process. It is not the intention of this paper to suggest that there is a right set of decisions that must be made, still less to tell countries what to do, but rather to raise issues to take into consideration.
This paper aims to present the fundamental ideas underpinning resource rent and to give some idea of its economic importance. However, the concept of resource rent is not easy to explain simply because it depends on an understanding of some key economic concepts (such as opportunity costs and normal profits). Due to its central role in fisheries exploitation, all fisheries managers need to have some familiarity with these terms. It should be an important part of policy development to ensure a minimum training in economics for fisheries managers.