The distributional impact of common‐pool resource regulations

Abstract

Purpose

Regulating common‐pool resources is welfare enhancing for society but not necessarily for all users who may therefore oppose regulations. The purpose of this paper is to examine the short‐term impact of common‐pool resource regulations on welfare distribution.

Design/methodology/approach

The authors model a game of common‐pool resource extraction among heterogeneous users.

Findings

It was found that market‐based regulations such as fees and subsidies or tradable quotas achieve a higher reduction of extraction from free‐access than individual quotas with the same proportion of better‐off users. Also, they make more users better‐off for the same resource preservation.

Originality/value

The quota regulation has attractive fairness properties: it reduces inequality while still rewarding the more efficient users.

Citation

Ambec, S. and Sebi, C. (2011), "The distributional impact of common‐pool resource regulations", Indian Growth and Development Review, Vol. 4 No. 2, pp. 123-141. https://doi.org/10.1108/17538251111172032