Reduction of the fishing capacity in “common pool” fisheries

Decommissioning schemes and administrative regulations on the fishing capacity are often used to reduce the problem of overcapacity in common pool fisheries. However, these means are seldom very effective as to limit the overcapacity in the longer term. The reason being that the regulations do not impact the basic incentives in the creation of overcapacity. A way to reduce the tendency for overcapacity in common pool fishery is to use lumpsum taxation of the capital. The advantage of the lumpsum taxation is that it changes the incentives in capital formation. The method is a well-suited way for the management authorities to address the problem of overcapacity encountered in the EU fishery.