Impacts Among Communities. Freely transferable quota shares may concentrate over time in some communities while other communities lose part or all of their quota (Eythorsson, 1996). It is difficult to predict the pattern and overall movement of quota in advance, since these will depend on a host of contextual factors and the design features of the program in question; generally, however, one may expect communities with a large share of quota to gain more because of more infrastructure and better access to capital. Some smaller communities dependent on fisheries and without alternative means of support are likely to suffer severe unemployment and related social and economic problems. McCay et al. (1995) demonstrate a clear geographical shift in quota holdings for the SCOQ IFQ program, where quotas are freely transferable. The same applies, they believe, for the Canadian program they studied; here more constraints were placed on transfers as well as on accumulation and ownership by nonfishermen, but the constraints were generally ineffective against strong economic incentives to consolidate holdings. In contrast, the Alaskan IFQ programs, which include some area restrictions, have maintained (to date) similar participation by Alaskan and non-Alaskan fishermen both before and after the program was implemented. In Iceland, the main accumulators of quota are companies in the larger towns of the northern part of the country. Small communities, with less than 500 inhabitants, have lost a much greater share of their quotas than larger communities.

To some extent, regional concentration of quota shares is unavoidable, a healthy sign of increased economic efficiency. The social costs, however, may outweigh the gains in economic efficiency. As was the case when agriculture became increasingly intensive and took advantage of gains to scale, negatively affecting traditional farming communities, some fishing communities will undoubtedly thrive, whereas others' valued life-styles and traditions will be threatened.

One way of dealing with undesirable flows of quota is to limit the transferability of quotas from one community or region to another (see Box 3.3). It has to be kept in mind, however, that changes in fishing technology, fish processing, and transportation may make the location of the fishing industry in certain communities or regions obsolete and economically inefficient. Rather than preventing the realization of economic benefits from such changes by limiting the transferability of quota shares, it may be preferable to allow transfers, but also to compensate disadvantaged communities with a fair share in the gains of the overall fishery through payments or buyouts. An alternative approach is to design an IFQ program to allow municipalities, regional organizations, or other entities representing the needs of local communities to purchase IFQs and create local rules about their allocation and transferability.

It may be argued that in overcapitalized fisheries, transferable IFQs could lead to downsizing of fishing technology, smaller vessels, and greater efficiency. For example, testimony from some Alaskan fishermen stated that IFQs have helped the small-vessel fisheries because they are able to operate in better weather

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