• hampered by limited information on biological parameters and an unwillingness to impose restrictive harvest limits without better information on the stock. The Pacific Fishery Management Council set the allowable biological catch for 1983 at 10,500 metric tons.

New entrants to a fishery may dissipate the economic rent both by flooding the market with harvested resource during the most productive harvesting times (thereby lowering the price received by harvesters) and by escalating the costs of harvesting. Escalation of costs is driven by the race for fish induced by the "ownership by capture" rule. According to this practice, the right to claim the rent associated with fugitive property (such as fish in the ocean) is established by the successful harvest of the resource. Fish landed in a boat become the property of the harvester, thereby entitling the harvester to normal economic returns and any rent associated with the landed fish. However, when access to the resources is not limited, people will compete for the greatest possible share of the rent. This competition will raise the costs of extraction until the rent has been absorbed by excessive costs (i.e., wasted inputs of capital and labor). Individual fishermen, by being the first to adopt an effective new harvesting technology, achieve a temporary advantage over other fishermen such that they obtain catch increases that more than offset the added cost of the new technology. But since the total catch is fixed by resource conservation and stewardship requirements, as expressed through the TAC-setting process, gains to the initial adopter of the new technology are offset by equal losses to other fishermen (i.e., it is a "zero-sum game"). The other fishermen quickly recognize their comparative disadvantage and also adopt the new technology. The outcome is that the total harvest is unchanged while the costs of harvesting are increased.

The race for fish is but one source of rent dissipation. Another source emerges from variations in productivity across fishing grounds (Gardner et al., 1990). Certain areas within fishing grounds may be substantially more productive than surrounding areas. As fishermen race for places to fish that are near their home port or for locations that have high catch rates, they expend resources that would not have been used if they had coordinated the use of fishing spots. This form of rent dissipation quickly accumulates as more fishermen enter a fishery and increasingly find their preferred spots taken (Higgs, 1982). Rent dissipation also arises from the management process, as potential harvesters expend resources in an attempt to influence allocation decisions (called rent seeking) (Krueger, 1974); Edwards (1994) showed that rent seeking occurring in association with IFQ programs could decrease their economic benefits.

Upon implementation of IFQs, a portion of the rent develops rapidly through a reduction in redundant vessels, reduced gear loss, and reduced catch discards. Rent sometimes also develops in response to increases in exvessel prices, such as occurred with halibut as more product could be sold fresh. See Box 1.1 for a simple bioeconomic model of a fishery.



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