accept monetary compensations for a loss.
11
The issue
further needs
empirical investigation
Loomis and Larson, 1994; Loomis and White, 1996. Nonetheless, the willingness to contribute
financially to the non-consumptive management of the resource might be important for the long-
term sustainability of the agreement.
I am aware that the point is provocative. The possibility that compensatory measures might be
an incentive and support self-enforcing agree- ments is nevertheless highlighted.
12
I am also aware that implementation of side payments
compensations to
losers together
with a
Kaldor – Hicks KH
13
criterion can be justified only on economic-ethical grounds Freeman,
1986, the KH decision rule being the more ‘ethi- cal’ solution within neo-classic measures of social
welfare change. Nonetheless, extending the do- main of economics to more holistic and ethical-
rooted approaches, an atomistic framework could be sharply inconsistent with broader definitions
of socio-economic welfare Norgaard, 1989.
6. Conclusions
The essay attempts to develop a new frame- work for addressing the management of whales
and marine mammalsresources framed also on economic grounds. It extends the existing litera-
ture Kuronuma and Tisdell, 1993; Bulte and Van Kooten, 1999; Bulte et al., 1998 by provid-
ing conceptual insights on institution making and bargaining. Although the topic may not be novel,
it does deserve further study, mostly focusing on sustainability and enforcement of environmental
agreements Barrett, 1992, 1994; Folmer and Musu, 1992 concerned with species that are both
an
economic mixed
good and
shared re-
source. What I have tried to stress is the neces- sity to bring together i the management based
on total value of the species; ii the bargaining on shared and mixed resources; and iii IEA and
institution policy making in a common frame- work, and investigating the possibility of setting
up a ‘new’ whale convention on such a frame- work.
The current IWC effort aimed at enforcing a stable IEA on whales has not been successful so
far. Following some years of stability of the deal after the ban, the situation is now one of sharp
polarisation and non-compliance. Anti-whaling countries — possessing a clear majority within
IWC — continue to vote a total ban on whaling, while whaling countries have resumed small-scale
whaling and have threatened starting to set up a parallel convention named North Alliance to
leave IWC. The majority clearly lacks the retalia- tory power and the institutional mechanisms
to enforce the deal in a long-run perspective. Creating a new whaling convention formed by
whaling nations alone would not lead surely to optimal
management. Consumers
demanding non-use stock-based values should be the agents
more concerned with enforceability and su- stainability
of whale
agreements, preventing
whaling countries from establishing their conven- tion.
During the 1997 IWC meeting, Ireland intro- duced a proposal for discussion, which was in-
tended to break the deadlock. That package could represent an example of a deal, in which
compensatory payments may be recognised and included explicitly Japan is accused of using
11
We note that the acceptance of a VPP is far from being achieved. Anti-whaling countries have been refusing to pay for
monitoring and other activities, claiming whalers should pay.
12
A similar argument is presented by Barbier et al. 1990 as far as management of elephants is concerned. Some similarities
exist between the international management of whales and elephants. And the effectiveness of a ban is disputed for both
species on economic grounds. Given the differences between species — elephants are land resources with a different set of
opportunity costs — the rationale for claiming economic arguments is, nonetheless, the same; bans are not self-enforc-
ing institutions, at least not in the long run. For a critical debate on the issue, see Schulz 1997.
13
Whenever we face a situation where losses and gains are related to each other unavoidably, so that a strict Pareto-im-
provement is not possible, we should use a Kaldor – Hicks definition of Pareto-improvement. By using a Kaldor – Hicks
approach, we can see whether or not a given equilibrium is Kaldor – Hicks optimal or not, that is, if someone can compen-
sate a loser and be better off.
overseas aid to ‘buy’ pro-whaling votes.
14
The proposal, after heard, discussion continues year
by year, whalers do not want to lose power within the convention. What if a menaced division,
sooner or later, occurs?
An agreement on what values IWC should manage and bargain has not been reached. Coun-
tries supporting non-consumptive uses have been exploiting a ‘whaling’ framework the current
IWC to pursue their goals. The equilibrium, I stress, is inefficient clearly in economic terms,
unstable and not self-enforcing. A new institution should be set up, from a ‘whaling’ one to a
‘whale’ one. But will it be possible to begin to attract the unanimity required to revise the
ICRW? It appears that the flexibility of ICRW schedule has been used to the advantage of
whales. But I claim that time is ready for a new step forward, for a re-founded and self-enforcing
new
convention. Both
conservationists and
whalers seem to reject any revision; this is ineffi- cient for whale management, and for whales.
I can sum up results and suggestions for further research by underlying the following.
If side payments can lead potentially to first best outcomes, second best economic solutions
are to be explored as well. To date, economic arguments have been absent from the IWC
arena. Indirect non-use Davis and Tisdell, 1999 and non-use values Barstow, 1986
should explicitly be recognised as elements of the resource total value on which bargaining
should be centred.
Compared with side payments, policies based on trade — basically trade threats — show
inconsistency with international conventions, then leading to temporarily sustainable agree-
ment. Moreover, a mainstream conclusion in environmental policy is to neglect trade policy
as a first best policy to manage IEA Black- hurst and Subramanian, 1992. Side payments
have been advocated often as a possible tool leading to efficient solutions Munro, 1979;
Ma¨ler, 1992.
Side payments require the acceptance of a ‘vic- tim pays principle’ Ma¨ler, 1992. I argue that a
victim pays principle is to be preferred as far as sustainability of agreements is concerned. This
for two reasons: first, non-consumptive values have to be captured and made visible to the
international community, and a visible pay- ment could better achieve the result. Secondly,
retaliatory power seems to be in favour of whaling countries.
Monetary payments could be used both to compensate whalers and to fund research, con-
servation activities and monitoring. Monitor- ing is a crucial part of the ex ante approach to
IEA along with assessment of optimal total quota and individual share distribution.
An ex ante approach could present drawbacks that are not to be underestimated. Reaching an
agreement may be very costly, if the aim is to define an optimal stock level stock harvest
vector taking account of total value and opti- mal side payments, then monitoring the deal. If
bargaining, and associated benefit transfers, were too costly significant bargaining and en-
forcement costs may lead to inapplicability of the deal, a second best solution is represented
by an auction, finalised at giving the right of managing the entire stock to the agent valuing
the resource the most, for a determined period of time. Marginal benefit equalisation is substi-
tuted by a corner solution, but some kind of economic not only biological andor political
approach would be introduced. An auction could be the optimal policy solution whenever
agents have different discount rates, so that who values the resource the most should man-
age it obviously being the higher bidder Munro, 1979. Different discount rates, with
non-users discounting the future the less, possi- bly represent the whale bargaining situation.
Three scenarios, given below, are likely to occur in the future.
1. IWC members will be able to bargain on different conflicting values within a re-formed
whaling convention, by means of new instru- ments and rules.
14
The proposal consisted of completion and adoption of a revised management scheme, designation of a global sanctu-
ary, permission of monitored coastal whaling within 200 miles by communities, cessation of scientific whaling loophole, and
prohibition of international trade in whale products.
2. Bargaining will occur within a re-founded Global Whale Convention, explicitly struc-
tured on total components of value. 3. Two different and conflicting institutions,
‘whaling’- and ‘whale’-oriented, respectively, will be generated.
Economic values and instruments, together with cultural and political factors Andresen,
1989, might play a role for the establishment of a new international regime to manage whales as
global resource.
7. Further reading
