Brian R. Copeland & M.

Scott Taylor
American Economic Review 2009.
ENV. 379
Duke U.
Katherine Macarena Antonio
Sharon Loxton

Research topic
Develop a theory of renewable resources management
where the degree to which countries escape the tragedy
of the commons (the enforcement of property rights,
and hence the efficacy of resource management), is
endogenously determined
assuming de facto property rights regime

Some Facts
Continuous declining of renewable resources stock

(deforestation, capture fisheries are in a state of decline

if not collapse).
Carbon emissions continue to grow at rapid rates
Poor environmental quality in many developing

countries
Who is responsible? Role

of international trade

Theory
an existing government regulates the use of a renewable

resource by a set of agents who have a right to harvest

(fishery, forest stock)
local resource contained within one country
agents may cheat on these allocations and risk punishment
the effective protection is not perfect, even though property

rights would be perfectly enforced if there was no

monitoring problem

Dividing into groups resource-rich

economies
HARDIN

SUCCESS IN
REGULATION

Limited relative
to Overcapacity.
De facto open
access .
No rents earned
from resources

OSTROM
Price low open
access, high the
protection s
afforded the
resource
Generate some
rates. No first
best

CLARK
With High
prices obtain the
fist best
With lower
prices even Clark
economies
exhibits open
access.

Parameters: Resources growth rate, Mortality rate,

Time preferences rates, Technologies.

Features of the model

The model can explain heterogeneity across countries

and resources in the effectiveness of resources

management
Predict that change in prices, population, and

technology can cause transitions to better or worse

management regimes.

Model
A. AGENTS

B. TECHNOLOGIES AND ENDOWMENTS

C. RESOURCES MANAGER

DETECTION RATE

FINE

Model
D. INCENTIVE CONSTRAINT

Expected presented value to cheating

Value of non-cheat option

An agent will not cheat when the cost exceed the benefits

Model
E. STEADY STATE
The steady state is unique. It exhibits either de facto

open access, limited harvesting restrictions, or an

outcome equivalent to that of the unconstrained
first best.
If:

Three forces determine the success

or failure in resources management
The regulators enforcement power,
the extent of harvesting capacity ,
and the ability of the resource to generate competitive

returns without being extinguished

Country characteristics and

management regime
Hardin economies will always exhibit de facto open
access in steady state. For any finite relative price p of
the harvest good, we have L=L0(p) and no rents are
earned in the resource sector.
2. If
1.

holds and there is overcapacity in the resource sector,

all economies will exhibit open access and zero rents at
low resource prices.

Applications
How the impacts of trade liberalization, technological

progress, and economic growth can differ quite

radically across countries and resources.
Trade liberalization is more favorable for resource

exporting countries, but if market integration also

brings new technologies these tend to destabilize
management systems.

Conclusions
generated the limiting cases of open access and perfect

management as endogenous outcomes, and linked

these outcomes to primitive country and resource
characteristics
model is highly stylized and focuses on three simple

determinants of success and failure in resource

management; as such, it surely cannot explain all of
the variation we observe in resource management
worldwide.

Conclusions
RESEARCH
A welfare maximizing regulator to show how a variety of
outcomes are possible even with a benevolent
regulator, extending to allow corruption or political
pressure.
Generate poaching or cheating in equilibrium, and
hence generalizing the model to allow for
heterogeneous harvesters could yield a richer set of
outcomes.
Using other not a very simple, single-species renewable
resource model with the Schaefer harvesting
technology.

THANK YOU