Can Government Financial Transfers Ever Lead to Responsible Fishing? A (New) Trade Theory Parable Public Deposited

http://ir.library.oregonstate.edu/concern/conference_proceedings_or_journals/cj82k859v

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  • Recent literature on trade in fisheries products and in factors of production for fishing can be used to ask when it might be welfare increasing to encourage government financial transfers (GFTs) in the fisheries. Using numerical techniques and assuming a small open one factor 2 good economy with production inefficiencies in the resource sector, welfare gains from GFTs that encourage productive efficiency can be seen over a wide range of prices, depending upon the costs of implementing the policies. GFTs that fail to sufficiently induce efficient production can be welfare-reducing. However, other ecnomic behavior engendered by GFT policy may favor the latter result. The groundfish crisis in Eastern Canada is discussed as a possible case in point. When the assumption of factor immobility and competitive factor markets are relaxed, comparative advantage arguments for trade in fishing services are also weakened. In these cases, the internal validity of trade models is not at issue, but rather their application to situations where the assumed conditions are at odds with economic realities. New International Trade Theory has heretofore mainly dealt with trade effects under assumptions that diverge from perfect competition. In that regard, the study of trade involving exhaustible resources and common pool behavior contributes to that research agenda.
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  • Wilson, James R. 2004. Can Government Financial Transfers Ever Lead to Responsible Fishing? A (New) Trade Theory Parable. In: Proceedings of the Twelfth Biennial Conference of the International Institute of Fisheries Economics & Trade, July 20-30, 2004, Tokyo, Japan: What are Responsible Fisheries? Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2004. CD ROM. ISBN 0-9763432-0-7
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