Perspectives on Rent Generation and Rent Appropriation in Fisheries

• Published in: Arctic Review on Law and Politics
• Main Author: Bertheussen, Bernt Arne
• Format: Article in Journal/Newspaper
• Language: English
• Published: Cappelen Damm Akademisk 2023
• Subjects: Arctic; Arctic review on law and politics
• Online Access: https://hdl.handle.net/10037/28085; https://doi.org/10.23865/arctic.v14.3721

The article debates the origin of rent in natural-resource based industries (NRBIs) such as fisheries, and how the rent generated can be appro­priated. The Norwegian fish harvest­ing industry is used to illustrate the arguments. It is argued that the industry-specific institu­tional framework of the fish harvesting industry positively affects the compe­titive forces of the industry, and thereby its economic performance. Fishery management institu­tions create high barriers to entry for outside firms, and they dampen internal rivalry between incumbent firms. As a result, the opportunity to earn what this paper labels institutional rent arises. The article further argues that nature itself and how it is managed through, for example, harvesting rules, enables an NRBI to earn resource rent if the players get free or cheap access to the input factor, in this case fish. Finally, the article argues that it is stakeholders other than the harvesting companies that control both the institutional and resource rents, that is, the owners of the natural resource and the authorities who manage it as well as the industry-specific institu­tional framework. Nevertheless, neither the owners nor the authorities benefit from the industry-specific rent generated. The rent is appropriated by the capital owners and the crew onboard the boats in the form of above-normal profits and above-normal wages. Whether or not such a skewed rent distribution is considered fair and sustainable is a political issue.