Putting Foxes in Charge of the Hen-House: The Political Economy of Harvest Quota Regulations

This paper considers a dynamic common agency model of natural resource harvest quota regulation in which both conservationists and harvesters vie to influence the regulator's quota allocations as well as the choice of regulator. Conservationists tend to benefit from the adoption of regulation since the regulator will reduce the aggregate harvest quota relative to the unregulated equilibrium. Harvesters, however, only support the adoption of regulation if the regulator places sufficient weight on their welfare. Because harvester's support of regulation is conditional while conservationist's support of regulation is unconditional, harvester's interests tend to be over-represented in the truthful Markov Perfect equilibrium.