A Bioeconomic Local General Equilibrium Assessment of Distributional Consequences of Small-Scale Fisheries Reform in Developing Countries

Abstract

Fisheries reform can increase wealth created by degraded small-scale developing-world fisheries. However, empirical studies of distributional consequences of reforms are scarce. Previous empirical studies largely focus on the fishing sector in isolation or do not disaggregate households into socioeconomic groups. We assess the distributional consequences of a fishery reform using a bioeconomic local general equilibrium model estimated and calibrated with data from a Philippine municipality. We disaggregate households into fishing and nonfishing households with different income levels. Fishing households overcome initial losses as the fish stock recovers, with wealthier fishing households attaining larger absolute gains. Nonfishing households suffer negative spillovers and higher fish prices, and gain only moderately as the fish stock recovers, leaving them worse off over the 20-year period assessed. Our results suggest a need for complementary policies to redress short-run losses and heterogeneous outcomes across households. We also examine how trade mediates the impacts of the reform.