The policy instruments available to governments are essentially of three types: the provision of public goods and services, the use of incentives/disincentives, and a legally enforceable framework of command and control measures.
How policy instruments are used to achieve development objectives naturally vary. Over the last decade a growing number of rich, industrialized countries have introduced policies and strategies inspired by the concept of 'open market economies' (sometimes modified to 'open, social market economy' to indicate that social considerations are taken). Based on the notion that highest economic growth - and therefore well-being, according to proponents - is achieved through unrestricted trade, the market decides on the allocation of labour and capital. In addition, there is a consensus among adherents of the open market economy model that the state is not an efficient entrepreneur - thus entrepreneurial activities should be carried out by the private sector.
In open market economies, public policies should aim to favour the movement of capital and labour among sectors of the economy (including internationally - at least for capital) and the movement of production factors should only respond to rewards received. In essence, the state should make lighter use of the first two categories of policy instruments (public goods/services and incentives/disincentives) and try to ensure a legal framework establishing incentives for producers and consumers to produce and consume, respectively, in a manner that improves their own well-being without damaging that of their neighbours.
The principles of the 'open market economy' have several consequences for the strategies applied to fisheries, although they are not the only influences affecting the sector. The supremacy of economic development policies (which tend to give more importance to income growth rather than its distribution) has been successfully challenged during the last decades of the twentieth century. Growing fears on the sustainability of an ecosystem conducive to human well-being has resulted in modified public policies towards both capture fisheries and aquaculture reflecting environmental concerns.
Important consequences of the 'open market economy' model
1) There is a trend towards eliminating publicly-funded economic support directed at fisheries and aquaculture. Direct public transfers to the fishers, aquaculturists and supporting industries are gradually being removed.
2) There is little, if any, direct involvement of the state in productive activities. Most governments that developed and operated publicly-owned industrial fishing fleets in the 1950s and 1960s have either sold or decommissioned them.
3) Some countries, basing their decisions on their country-wide economic reforms, have imposed on the fishing industry charges for services that the state dedicated to the industry, such as fisheries research and monitoring, control and surveillance (MCS). However, payment for the service is often balanced by including industry representatives on the management boards of the institutions delivering these services. It is likely that this practice will spread to a growing number of countries.
4) The notion that employment in fisheries can rise, but is most likely to fall, is gaining acceptance. Thus, public policies are increasingly based on the fact that fishers who fall on hard times are not necessarily likely to return to the industry.
5) The public strategy for fisheries increasingly tends to be developed through a continuing dialogue with the stakeholders in the sector.
6) A specific and flexible legal framework supports the government policy and administrative practice towards the sector. For capture fisheries, for example, the framework includes provisions enabling fishery administrations to deal with the issue of effort limitation/control.
7) Development of new technology is seen as a private sector (and university) responsibility, not as something the public sector should undertake through publicly-run fishery research and development institutes.
Development policy advances
Fishery economists have long maintained that open access fisheries lead to economic waste in the sense that the same volume of fish, and often larger volumes, could be landed with a much smaller fishing effort. Furthermore, they argue that when labour and capital are in short supply this situation does not make economic sense. A reduced fishing effort would - when stocks have recovered - lead to large profits for those who remain in the fishery. Such 'excess' profits are frequently referred to as 'economic rents'. Increased attention is being given to develop policies that, on the one hand, would obtain these rents, and, on the other, ensure their equitable distribution. One strategy that would create the economic rent is the introduction of rights-based fisheries - including the use of Individually Transferable Quotas, or ITQs.
Among the countries that pioneered the advancement of open market economies, there are some for which fisheries are important and a few for which export of fishery products are essential. The latter (e.g. Iceland and New Zealand) have naturally taken a vigorous interest in the conditions under which fish is traded internationally. Following the principles of the open market economy, they argue in international forum for the removal of all barriers to international trade in fish and fish products. Subsidies to the fisheries sector are considered, inter alia, as creating such a hindrance. There are also those who argue that the suppression of subsidies would benefit the marine ecosystem as subsidies lead to excess fishing capacity
Some poor, developing countries (e.g. Namibia, Maldives) put quite some effort into the development of a strategy for achieving economic and social development objectives in the fishery sector whereas others do not. In poor, developing countries where fisheries represent a minor section of the economy and fish consumption is low (e.g. Afghanistan, Paraguay, Swaziland) there is no strong reason for attempting to develop specific policies towards the fishery and aquaculture sector.
However, the principles of open market economies are gradually being promoted in several developing countries where fisheries are important. Introduction of these principles is difficult as they rest upon assumptions about the economy that may not hold in poor, developing countries such as equal opportunity in acceding to factors of production (capital, land), equal access to information and an efficient juridical system. Thus it is understandable that implementation is partial and slow in many countries. Also, given that fishery administrations often were small and relatively weak when open market policies were introduced, the margins for reduction are and have been very small. It is therefore not surprising that the results are hardly those expected, as based on the experience in wealthy, industrialized fisheries.
Difficulties in adopting open market economy principles
1) Where fishers live at a subsistence level, subsidies may have a significant impact on revenues. If there are only very weak social safety nets (extended families rather than public unemployment benefits, etc.) the elimination of subsidies may threaten the survival of fishing communities.
2) Artisanal, small-scale fishing communities are seldom equipped to take on responsibility for the provision of public services, and even less for creating them where they do not exist. It is evident that artisanal fishers only in very unusual situations have the economic strength to pay for MCS or monitoring of wild stocks. A sudden, drastic and permanent improvement of the fortunes of fishers is needed to provide the basis for introducing fees or taxes. The development of the Nile perch fishery on Lake Victoria is one such example (a landing tax is paid by Tanzanian fishermen). However, in most developing countries there is no effective MCS service and the public sector generally does not have the economic resources needed to create one. Furthermore, unless such a service is created by the public sector, it is unlikely to come into being and it is highly unlikely that fishers would pay for such a system until they have proof that it functions in their interest.
3) In the absence of a strong fishery administration and local manufacturing industries, technological developments must come from abroad. Fishers do not have the funds, the infrastructure and the know-how to improve fishing equipment, machinery and gear.