Natural resource industries, 'tragedy of the commons' and the case of Chilean salmon farming
Michiko Iizuka & Jorge Katz
#2010-061
Chilean salmon farming has been considered as an outstanding example of
success after growing at two digit rates for more than twenty years.
With further insight, we now know that such rapid process of expansion
came at the expense of sanitary and environmental deterioration. The
outbreak of ISA- a viral disease that kills salmon - in 2008 has made
this utterly clear. The overexploitation of the ´common´ - pristine
waters - upon which the industry operates, and the lack of an adequate
regulatory mechanism monitoring environmental impact contributed to a
gradual - but not always adequately perceived - long term decay of
industry performance. The paper shows that industries based on the
exploitation of a CPR - common pool resource - require a quite different
analytical approach than the one conventional neoclassical theory offers
us for the understanding of firm and industry behavior. Our study shows
that industries of this sort require location specific know how and R&D
efforts plus public/private cooperation in order to maintain long term
sustainable growth.
Keywords: common pool resources, 'tragedy of commons', natural resource
based industry, Chile
JEL code: Q22, Q57, L22