Beyond ITQs: property rights as a management tool

Individual transferable quotas (ITQs) are frequently identified as “rights-based management”, and are often presented as the most desirable form of fishery property right. While ITQs have some features of private property, they create an incomplete set of rights. Virtually all the decisions that determine the key variable, the state of the stock, are determined by the government. An alternative institutional approach would be to shift the decision-making about the state of the stock to the owners (e.g., the ITQ holders). This would require collective decision-making by the joint owners. The most efficient institution for collective decision-making is the corporation. The paper outlines how corporate management could be incorporated within an institutional structure that retains a government role in regulating the external effects of fishing.