Property Rights as a Means of Economic Organization
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- 6. Estimated Q -values for three quota systems
- Estimated Quality of Quota Property Rights: Iceland, New Zealand and Norway
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A diagram illustrating the characteristic footprint of the two property rights is provided in Figure 6. Figure 6 The quality map of two property rights: An example
The first property right is pretty close to a perfect property right and scores well on the Q-measure as shown in Table 1. The lack of transferability (e.g. due to limited divisibility) is the main subtraction from a perfect score. The other property right is obviously fairly poor, primarily because of the lack of duration and transferability. This is reflected in its Q value which according to Table 1 is only 0.43. 6. Estimated Q-values for three quota systems In this section, we apply the Q-measure developed in section 5 to assess the quality of the fisheries property rights in the quota systems of Iceland (Arnason, 1996a, Runolfsson, 1999), New-Zealand (Sharp, 1996, Major, 1999)and Norway (Hannesson, 1994, Arnason, 1996b). In Iceland and New Zealand fisheries management is based on fairly complete ITQ systems. Norway, by contrast, operates most of her fisheries on the basis of an IQ system, i.e. an individual quota system with very limited transferability of the quotas. In all three countries, the security of the property right is fairly high. However, in Norway, in certain fisheries, new vessels may be allocated quotas thus subtracting from the quota shares of the other fishing vessels. Clearly this reduces the security of the Norwegian property right. In all three countries the exclusivity of the harvesting right is pretty high, really only limited by government fisheries regulations which in the case of Iceland and in particular Norway are more extensive than those in New-Zealand. Permanence of the property right differs greatly between the countries. In New Zealand the quota rights are explicitly in perpetuity. In Iceland they are of indefinite duration but there are non-trivial socio-political threats to the continuation of the system. In Norway individual quota rights are explicitly non-permanent, allocated only for a year at a time. However, since quotas are customarily allocated the previous recipients in more or less the same proportions, it may be claimed that the associated property right has gained a degree of permanence. Finally, transferability in New-Zealand is close to perfect (only foreigners excluded). In Iceland, transferability is only slightly more restricted. In Norway, as mentioned above, there is virtually no transferability of the quotas. A rough numerical estimate of the values of the property rights characteristics for these three countries is provided in Table 2. The corresponding characteristic footprint are illustrated in Figure 7.
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