Theory and practice of ITQs in Iceland. Privatization of common fishing rights

In Iceland, fish quotas have been partly transferable since 1984 and freely transferable since 1991. Here, the assumption that an ITQ-regime will lead to an immediate reduction of catch capacity and discourage investment in the fisheries seems questionable, as the ITQ-regime seems to represent an input of “new” capital into the fisheries. As a result of quota leasing arrangements, tenancy relations have developed between parts of the coastal fleet and companies with large quota holdings. Crew wages have in these cases dropped, a situation that has provoked two strikes among fishermen. The demand for quotas is influenced by unemployment and lack of alternative sources of income for fishermen. Municipalities are in a number of cases significant participants in the quota market, as there are strong ties between companies and municipalities. A redistribution of wealth and income is taking place as a result of the system.