Pay a man to fish: subsidies, trade, and cooperation in the global commons

This seminar estimates the potential gains from regulating economic activity in the global commons, tracing out welfare trade-offs.
About this Event

Part of the Inequalities Seminar Series

Speaker:
Aaron Berman, PhD Candidate in Economics, Massachusetts Institute of Technology

Most contemporary environmental issues are global in scope, but international cooperation to address them has remained elusive. Against this backdrop, the World Trade Organization has just ratified a historic agreement to regulate industrial subsidies for fishing fleets, but several developing countries have resisted the agreement, citing a desire to industrialize their fishing sectors and extract resource rents in the way that developed countries have done historically.

In this project, I estimate the potential gains from regulating economic activity in the global commons, tracing out both cross-country and intertemporal welfare trade-offs. I develop a model of trade policy that features standard terms-of-trade motives and a new non-pecuniary channel that arises when resource stocks are shared. I assemble a comprehensive geospatial dataset on fishing activity since 2010 and, exploiting exogenous variation in fishing locations created by ocean waves, provide evidence of meaningful cross-country productivity spillovers from harvesting activity. I then use my data and spillover estimates to simulate the effects and welfare incidence of a multilateral agreement to reduce fuel subsidies.

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