Question

2. Property rights over the world's oceans are not well-defined. Recently, experts have noted that fishing stocks are declining as the seas' resources are overused.                                                                                    

   a) Explain, in economic terms, why this might have happened.                                                                                      

  b) Commercial fishing firms in countries all over the world are complaining about the decline in their industry. The response of many governments has been to subsidize the fleets in their countries. Explain this as an example of government failure.

Answer 1

(a). First of all we will understand why the fishing stock in world's oceans have been rapidly declining.

So here are some main reason behind the decline in fishing stock in all over the world -

1. It is difficult to regulate overfishing in unavailability of resources and tracking activity.

2. There are only few or we can say no rules in international sea territories to regulate fishing practice.

3.lack of knowledge is also one of the most important reason behind overfishing.

4. Some of our countries have provided subsidies to fisherman which keeps their number always higher than what it needs to be.

5. Improved fishing technology also play a major role in the process of overfishing.

6. Ineffective enforcement of rules and regulations.

7. The last reason behind overfishing is that fishing has industrialized . In spite of knowing the rules and regulations the leading companies of fishing markets sometimes do overfishing just for their economic means.

(B). First of all we need to know what is government failure ?

Government faliure : It refers to the intervation of government in the market to fix a problem but unfortunately, the intervation of government make the situation worse.

Now we'll need to know that is overfishing is an example of government faliure ?

The answer is probably yes, let's have a look.

In the fish market all the fishing firms all over the world started complaining about the decline in their industry. So, to resolve this problem government intervene in the market and provide subsidies to the fleets.

But, unfortunately it boost the problem of overfishing.

Now we can say that it is an example of government faliure.