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Abstract
When faced with opportunities for greater self-governance, the New Zealand fishing
industry managed to make only limited progress. Why industry was unable to progress
self-management more effectively remains an interesting question. This paper argues
that the benefits of greater self-governance were probably less than the significant
transactions costs to self-organise. The benefits were probably smaller in New Zealand
than elsewhere, because reform had already reduced the costs of fisheries administration.
And the transactions costs confronting industry were substantial. First, unanimous
agreement was required for self-governance, which created high transactions
costs. Second, the tools for private enforcement were limited. Third, policy failed to
specify clearly the expectations of self-governance, so the investments in self-governance
are unusually risky. The government had unrealistic expectations that self-governance
would solve third-party environmental externalities as well as fishing
externalities. This implied high transactions costs to negotiate with third parties, such
as environmental groups. Fourth, the standards for accountability were difficult to
specify. This experience identifies four key policies if devolved fisheries governance is
to be promoted: non-unanimous decision-making; private enforcement; clarity on
areas for self-governance; and clarity on accountability standards.