Rules for Marine Natural Resources
Consider that people gain ownership of a resource by the work it takes to create value, that is by mixing productive labor with land. A farmer’s labor with fences and plowing land sets boundaries for farms and orchards as the farmer’s labor and capital is invested in planting, fertilizing, weeding, and pruning before the harvest.
For farmers of the sea, ownership institutions and establishing boundaries can seem more difficult. Who owns lobster beds and how will disputes be managed? The late Elinor Ostrom won the Nobel Prize in economics for research and analysis of ways to govern
common pool resources.
Well, let me use the example of lobster fisherman in the state of Maine. In the 1920s, they almost destroyed the lobster fishery. They regrouped and thought hard about what to do and over time developed a series of ingenious rules and ways of monitoring that have meant that the lobster fishery in Maine is among the most successful in the world. —From Elinor Ostrom Nobel Prize telephone interview
A further discussion of Ostrom’s research and analysis of common pool resource challenges and institutional solutions is here:
One of the most well-known treatments of the question is Garrett Hardin’s 1968 book The Tragedy of the Commons, which describes how overexploitation of common pools was rapidly increasing worldwide. Traditional economists proposed two responses to overexploitation.
The first is privatisation with adequate means of measurement and control. This depends on having the necessary technical and financial means to exercise adequate control and may only be feasible if ownership is restricted to a few participants.
The second is government ownership and a tax on using the resource.
Ostrom proposed a third solution: retain the resource as common property and let the users create their own system of governance. In Governing the Commons: The Evolution of Institutions for Collective Action, Ostrom argues that common property governance doesn’t have to be tragic, and that users themselves can devise rules and enforcement mechanisms that may be better than restrictions imposed by outsiders with little knowledge or understanding of local conditions.
One of the more surprising conclusions of her research is that users should take care of monitoring and sanctions themselves (or entrust this to someone accountable to them). As the Nobel committee points out, this “challenges conventional notions whereby enforcement should be left to impartial outsiders”. — from OECD Insights, July 1, 2011