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Linkages between Fisheries, Poverty and Growth: Key concepts and methodology

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A report prepared for the …

A report prepared for the
Department for International Development (DFID)
Project: ‘The Role of Fisheries in Poverty Alleviation
and Growth: Past, Present and Future’

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  • 1. APPENDIX D Case Study Methodology and Theoretical Background
  • 2. INVESTIGATING THE LINKAGES BETWEEN FISHERIES, POVERTY AND GROWTH: KEY CONCEPTS AND METHODOLOGY A report prepared for the Department for International Development (DFID) Project: ‘The Role of Fisheries in Poverty Alleviation and Growth: Past, Present and Future’ DFID/PASS Contract: AG0213 February 2005 (Final version)
  • 3. STUDY TEAM Dr. Stephen Cunningham Dr. Arthur E. Neiland IDDRA Ltd Portsmouth Technopole Kingston Crescent Portsmouth Hants PO2 8FA Tel: +44 (0) 2392 658232 Fax: +44 (0) 2392 658201 E-mail: cunningham@iddra.org, neiland@iddra.org D-2
  • 4. SUMMARY This background report presents a methodology for the DFID/PASS Project ‘The Role of Fisheries in Poverty Alleviation and Growth: Past, Present and Future’. The objective of the study is to conceptualise the interface between poverty reduction and fisheries development. In particular, the study seeks to identify the links between poverty reduction and fisheries development under different policy arrangements, supported by empirical evidence generated through a number of case study countries. There are five sections to this report: Section 1 gives an introduction and the objectives of the project overall. Section 2 outlines the study approach for Phase 1 (background report and methodology). Section 3 is the core of the report and presents succinctly the key issues that are central to the study covering the areas of – poverty and development, economic growth and fisheries, fisheries development and management, policy and governance. The overview of the issues above is underpinned by a series of more detailed appendices. Drawing on Section 3, Section 4 develops a template for the case study reports, and Section 5 presents the Terms of Reference for the case study authors. The national case-studies will be undertaken in 8 countries (Bangladesh, India, Thailand, South Pacific Island States, Morocco, Mauritania, Malawi and Canada). The results will be synthesized to produce a final report and policy brief by June 2005. KEY WORDS: Fisheries; Policy; Poverty; Economic Growth; Concepts; Methodology; D-3
  • 5. ACRONYMS AND ABBREVIATIONS BMI Body Mass Index BN Basic Needs approach CEC Commission of the European Community DFID Department for International Development of the United Kingdom DWFN Distance Water Fishing Nations DC Developed Country DevC Developing Countries EU European Union EEZ Exclusive Economic Zones FAO United Nations Food and Agriculture Organisation FFA Forum Fisheries Agency (South Pacific) FGT Foster-Greer-Thorbecke measure FMU Fisheries Management Unit GDI Gender Development Index GDP Gross Domestic Product GNP Gross National Product HDI Human Development Index IMF International Monetary Fund IQ Individual Quota ITQ Individual Transferable Quota MDG Millennium Development Goals MEY Maximum Economic Yield MSY Maximum Sustainable Yield NAM Non-Aligned Movement NGO Non-Government Organisation NR Natural Resources NRM Natural Resources Management OAU Organisation for African Unity OECD Organisation for Economic Cooperation and Development PASS Programme of Advisory and Support Services to DFID (HTPSE Ltd) PEP Poverty-Environment Partnership PG Poverty Gap PQLI Physical Quality of Life Index PRS Poverty Reduction Strategy PRSP Poverty Reduction Strategy Paper (World Bank) RMR Resting Metabolic Rate RNR Renewable Natural Resources SAP Structural Adjustment Programme SD Sustainable Development SSF Small Scale Fisheries SY Sustainable Yield TAC Total Allowable Catch TC Total Cost TR Total Revenue UNCLOS United Nations Conference on Law of the Sea UNDP United Nations Development Programme UNRISD United Nations Research Institute on Social Development D-4
  • 6. WFS World Food Survey WTO World Trade Organisation D-5
  • 7. CONTENTS Page no. SUMMARY 3 ACRONYMS AND ABBREVIATIONS 4 1. INTRODUCTION AND OBJECTIVES 7 2. STUDY APPROACH 8 2.1. General approach 8 2.2. Phase 1 study components 8 2.2.1. Literature review 8 2.2.2. Consultation with experts 9 2.2.3. Production of briefing papers 9 2.2.4. Synthesis of briefing papers 9 2.2.5. Development of study template and case-studies 9 2.2.6. Selection of country case-studies 10 2.2.7. Review and finalisation of methodology 10 2.2.8. Implementation of Phase 2 10 2.2.9. Preparation for Phase 3 11 3. KEY ISSUES 11 3.1 Introduction 11 3.2. Poverty and development; 13 3.3. Economic growth and fisheries 15 3.4. Fisheries development and management 16 3.5. Policy and governance 19 4. STUDY TEMPLATE 22 5. TERMS OF REFERENCE – COUNTRY CASE-STUDIES 27 6. CONCLUDING REMARKS 30 APPENDICES 31 A1. Poverty and Development – Evolving Concepts and Approaches 32 A2. Economic Growth and Fisheries 48 A3. Fisheries Development and Management – Key Issues 57 A4. Policy and Governance for Development 75 D-6
  • 8. 1. INTRODUCTION AND OBJECTIVES The objective of the Renewable Natural Resource (RNR) and Agriculture Team in DFID’s Policy Division is to increase the contribution of RNR and agriculture (including fisheries) to reducing poverty, by encouraging decision makers to adopt policies and measures that can be integrated in practical ways into broader poverty reduction processes. The fisheries programme initiated by the Team recognises that fisheries are often instrumental in helping reduce poverty, and underpin the livelihoods of the absolute poor in rural areas of many developing countries. The objective of this study is to conceptualise the interface between poverty reduction and fisheries development. In particular, the study seeks to identify the links between poverty reduction and fisheries development under different policy arrangements, supported by empirical evidence generated through a number of case study countries. The main outputs of the study are shown in Box 1: Box 1: Main outputs of the study • the empirical evidence of the role of fisheries in supporting growth and poverty reduction, presented in the form of a set of case studies, and • a synthesis policy paper with outline strategy to guide future DFID interventions. This background report is structured as follows. Section 2 outlines the study approach. Section 3 is the core of this report and presents succinctly the key issues that are central to the study. Section 3.1 outlines current thinking on poverty, its measurement, diagnosis and approaches to poverty reduction. A key general finding is that a major factor in poverty reduction around the world is broad economic growth. Section 3.2 looks therefore at the factors determining economic growth performance and on the role that the fisheries sector might play in contributing to economic growth. Section 3.3 considers the development and management of fisheries. It focuses on the way in which fisheries can contribute to poverty reduction. Section 3.4 discusses the importance of the policy environment for ensuring that the potential contribution of the fisheries sector is fully realised. Section 3 presents an overview of the issues. It is supported by Appendices A1-A4, which provide more detailed discussion. Drawing on Section 3 and on the Appendices, Section 4 develops a template for the case study reports, and Section 5 presents the Terms of Reference for the Case Study authors. D-7
  • 9. 2. STUDY APPROACH 2.1. General approach The study team drew upon their expertise in development economics, natural resource management and fisheries policy and governance to address the specific objectives of the current phase (Phase 1) of the overall study (Box 2). This includes experience of fisheries management in both Developed and Developing Countries, and with particular reference to the usage of multi-disciplinary approaches and frameworks. The overall study structure and implementation schedule is shown in Box 2 below: Box 2: Overview of study ‘The Role of Fisheries in Poverty Alleviation and Growth: Past, Present and Future’ Phase 1 (15 Nov 2004 – 4 Feb 2005): Produce background paper in order to develop case-study approach including template for case-studies and Terms of Reference for case-study authors; Phase 2 (Feb 2005 – 31 March 2005) Case-studies undertaken in eight countries (Bangladesh, India, Thailand, Forum Fisheries Agency (South Pacific Island States), Mauritania, Morocco, Malawi and Canada); Phase 3 (4 April 2005 – 13 May 2005) Develop synthesis report, policy brief and final project report; 2.2. Phase 1: Study components The approach for Phase 1 (November 2004 – February 2005) consisted of nine components, as follows; 2.2.1. Literature review To provide an essential underpinning to the study and to allow the development of a background paper, a review of the international literature was undertaken. With an emphasis on providing a good understanding of the conceptual link between poverty reduction and fisheries development, it was necessary to draw on a broad range of literature including areas such as fisheries management and development, natural resource management, economic development and economic growth, poverty and poverty analysis, and policy and governance. The idea is that the background paper (this report) will be informed by both fisheries and non-fisheries elements, but that the process is expected to be two-way, with the background paper from this project D-8
  • 10. having wider implications than just to the fishery sector in terms of ensuring pro- poor growth based on common pool resources. 2.2.2. Consultation with relevant experts and practitioners At various times during Phase 1, the work of the study was discussed with a number of relevant experts and practitioners in the fields of fisheries and development, principally at DFID. In addition, Arthur Neiland attended a one-day meeting on the management of natural resources as part of the VI. Poverty-Environment Partnership (PEP) meeting in Berlin on 2nd December 2004 (PEP, 2004), and gave a presentation on fisheries and pro-poor growth. This provided a good opportunity to interact with experts from a wide range of international development organisations, and to participate in discussions on the role of natural resources in pro-poor growth. 2.2.3. Production of four briefing papers The results of the literature review were used to produce four briefing papers which attempt to identify and explain the major issues relevant to the study. Each of these papers is included as a separate appendix to this report as follows: A1: Poverty and Development – Evolving Concepts and Approaches; A2: Economic Growth and Fisheries A3. Fisheries Development and Management; A4: Policy and Governance for Development; 2.2.4. Synthesis of briefing papers The four briefing papers (above) were then synthesised to present a succinct identification of the key issues and the inter-relationships between them. From the beginning, the approach which was laid down for the study was used to guide the synthesis. Essentially, it was decided to approach the problem of pro-poor growth from the fish resource end of the spectrum, looking at two important aspects. First, historically and in the present, to consider the strategy that has been adopted for the exploitation of fish stocks, and the impact of this on economic growth, and on the poor in particular. Second, alternative strategies for the exploitation of fish resources and the impact that such strategies might be expected to have for pro-poor growth and other important indicators, such as resource sustainability. Initially, therefore, the synthesis focuses on poverty and poverty alleviation (A1), and the important role of economic growth in this (A2). The contribution of fisheries to economic growth is then considered, looking at fisheries development and management options (A3). Finally, the impact of the policy and governance context on fisheries and its contribution to economic growth and poverty alleviation is examined (A4). 2.2.5. Development of study template and national case studies On the basis of the key issues identified and synthesised (above), a study template was developed to form the basis of a series of national case-studies from around the world. The case-studies will be implemented by nationals (or country specialists) from a range of countries / regions (as explained below), using both primary and D-9
  • 11. secondary information sources, analysing the role of the fisheries sector for poverty alleviation. Each case-study will be defined by a Terms of Reference (Section 5). It is planned that the case-studies will examine information and trends from current fisheries systems as well as historical information (where appropriate) to assist in developing an understanding of the key role fisheries has played in the past, continues to play today and is likely to play in the future. The case-studies will take account of the impacts (and likely future impacts) of recent declines in capture fisheries. Although these may have been offset by gains through (say) value-added processing and high-value, export-oriented aquaculture, the extent to which (i) this is sustainable; and (ii) the poor have benefited directly or indirectly from these gains (or, conversely, the extent to which they have become ‘losers’) are factors to be examined. 2.2.6. Selection of case-study countries The following countries have been identified for case studies: Bangladesh; India; Thailand; Pacific Island States (Forum Fisheries Agency); Mauritania; Morocco; Malawi; and Canada (Atlantic cod); 2.2.7. Review and finalisation of study methodology As part of the process of developing the study, a draft version of the current report was distributed to a number of relevant experts and development practitioners for comment, and also to the selected case-study authors. Comments and suggestions on the content were requested, with particular reference to the following points: - Do the four briefing papers (A1 – A4) provide effective coverage of key issues relevant to the study? - Does the synthesis (Section 3) show the important linkages between issues? - Does the study template (Section 4), building upon the synthesis (above), provide a useful framework for the case-studies? - Comment on the availability of information in your country relevant to completing each of the template sections (for case-study authors in particular). In the light of comments received, the draft report and methodology was finalised and then re-distributed to the case-study authors and others. 2.2.8. Arrangements for implementation of Phase 2 Phase 2 will commence with the commissioning of the national case-studies in February 2005. The case-study authors will be expected to provide an interim progress report on 7th March, and the IDDRA team will provide comments on any issues arising during the course of the work. An e-mailing list will be established for this purpose. By 31 March 2005, the draft case-study reports should be completed and sent to IDDRA. D-10
  • 12. 2.2.9. Preparation for Phase 3 Following completion of the case studies, a key synthesis paper will be prepared. Case study authors will be asked to comment on this paper, which will cover the following broad areas (and others depending on the results obtained). Key Synthesis Paper: The IDDRA study team will distil relevant evidence from the case studies and synthesise this into a key policy brief/strategy paper (to be defined) that will identify: - Common facets of success in the development of fisheries for sustainable growth; - Common facets of success in the development of fisheries for poverty reduction; - Trade offs between efficiency (e.g. using DWFNs vs. local fleets), equity (e.g. open access for the poor - safety nets with rent dissipation and the sustainability/effectiveness of this compared with other possible scenarios such as decommissioning and alternative income generation) and environment (e.g. fishing within multi-species stocks vs. biodiversity); - Recommendations for future strategies (including capacity building) inter alia to support pro-poor growth. The analysis will focus on features relevant to governance, policy processes and management that have led to successful pro-poor outcomes as a result of wealth generated sustainably from fisheries and aquatic resources. 3. KEY ISSUES 3.1. Introduction In this section, the key issues that are central to the overall study will be presented succinctly. A more detailed discussion is provided in the Appendices (A1-A4) which underpin this section. It is recommended that case-study authors should read these sections and the appendices carefully, and use them to focus their implementation of the study template (Section 4 below). In other words, the case-study authors should attempt to ensure adequate coverage of the key issues highlighted in this section (and the appendices) within the reports which they produce. The reason for emphasising this point (which will appear obvious to the experienced case-study authors selected for work) is that many of the ideas and approaches to fisheries management and its relationship to poverty presented in this methodology report are relatively novel – for example, fisheries management is conventionally based on biological principles, whereas in this study the focus is on ideas from economics and social sciences such as resource rent generation and use, and institutional frameworks and policy processes. A significant complication in all this is that government documents and other likely sources of information in many countries will tend to focus on biological management of fisheries, and it will require a significant level of detective work, by case study authors, to put together the alternative information required for a more D-11
  • 13. broad-based analysis of fisheries and poverty. This is the challenge faced by the current study. To begin, it should be recognised that fish resources are inherently extremely valuable, representing a potential source of renewable wealth to the countries which own them. It was the observation (in Canada in the 1950s) that the fishers exploiting these valuable resources were ironically amongst the poorest members of society that gave the impetus for the development of fisheries economics. Since the 1950s, much progress has been made to explain in theory why the exploitation of such valuable resources is so often associated with poverty. Regrettably, less progress has been made in developing and implementing policies that allow the wealth inherent in fish resources to be generated and used for poverty alleviation. The lack of progress in practical implementation may be explained in many ways. A number of broad themes may be identified, however, which are developed further in the sub-sections 3.2 to 3.5 below. The theory of fisheries economics demonstrates, and the empirical evidence confirms, that unmanaged fisheries will be overexploited, always in an economic sense and in many cases biologically also. The management of fisheries is therefore required. But developing effective management schemes has proved to be a difficult task. One important reason is that it has taken a long time for the concept of wealth (in the form of resource rents) to enter policy consciousness, and this process is far from complete. As a result, the benefits obtainable from fish resources have been, and in many countries (both developed and developing) continue to be, perceived purely in terms of the fishing activity itself (employment, incomes, value-added, livelihoods). Perceiving the benefits solely in this way has at least two unfortunate effects. First, it makes high exploitation levels appear attractive, since generally variable like employment are positively correlated with the exploitation level. Second, it means that in order to benefit from fish resources, people must be fishers (or be closely associated with the fishing activity or someone who is). To the extent that it is addressed at all in policy formulation, the issue of the nature of the benefits from fish resources is generally only addressed implicitly. There is often an implicit assumption that the benefits must be taken through the activity. When the objective is to use such resources for poverty reduction, it becomes essential to address explicitly the nature of the benefits available and sought. Otherwise, it is impossible to answer questions such as: what is the target group of poor people? A policy relying on activity-based benefits can only target poor fish exploiters (or at best poor fishing communities) whereas a policy based on the wealth of the resource allows much broader scope in terms of potential beneficiaries. Important subsidiary aims of this study are: D-12
  • 14. • to demonstrate the nature, and through the case studies the quantitative importance, of the different types of benefit obtainable from the exploitation of fish resources, and • to assess the potential contribution of fish resources to poverty reduction as a function of the type of benefit. A second major reason for the lack of practical progress in fisheries management is the absence of appropriate instruments and institutional arrangements. Partly, this is because inappropriate objectives have emerged from the policy process. For example, resource sustainability, which is in fact simply a constraint on the ability to achieve other goals, is probably the most common objective for fisheries management. As a result, in many cases, fisheries management has become little more than a forlorn attempt to keep exploitation levels within the resource constraint. Even where it has been achieved, resource sustainability has usually been associated with economic overexploitation, with the wealth of the resource dissipated. However, even where the importance of economic factors is recognised in the policy process, the design and implementation of appropriate instruments and institutional arrangements has proven to be a difficult challenge. The result is that the widespread failure of fisheries management has resulted in missed opportunities for sustained fisheries-based growth and in many cases to the gradual erosion of their potential to address poverty outcomes. In order to reverse this situation, radical change in the approach to fisheries development and management is needed. The following sections outline the main issues in this change. 3.2. Poverty and development Poverty is a major global problem with about half of the world’s population living on less than US$2/day. In the World Development Report (2000), the World Bank states that poverty elimination is the world’s greatest challenge, and an international development target has been proposed (OECD) of reducing half of the proportion of people living in extreme poverty by 2015. Many donors and international development agencies have responded with a range of plans. There is also an active and growing debate and associated research into key poverty issues – How to measure poverty? How to identify and characterise the poor? What are the causes of poverty? How to address poverty reduction? There has also been a renewed interest and recognition of the role of economic growth in development, with greater emphasis on the distribution of benefits (‘pro-poor growth’). There are three broad categories of methods used to measure poverty – nutrition- based methods, basic needs and composite indicators, and income-based measures. All of these methods have both strengths and weaknesses. The limitations of income- based measures (e.g. failure to include non-marketed production) originally spurred attempts to develop new approaches, leading to the emergence of the Basic Needs (BN) and Human Development Index (HDI). D-13
  • 15. However, subsequent research has shown a high degree of correlation between income and HDI, BN-indicators and others. Overall, income-based measures aim to quantify the number of individuals or households falling below selected poverty lines. Other indicators of relative poverty include the $1/day and $2/day measures. The reporting of income-based measures at national level provide a general overview of poverty for policy-makers. They can also be decomposed by region, sector, gender etc and provide an indication of which societal groups are vulnerable and how poverty alleviation interventions might impact on such ‘at risk’ groups. Poverty measures provide an indication of the scale of the problem, but they cannot provide any explanation on why people are poor or why poverty is so significant in particular sectors or countries. Since the 1950s, development economists have attempted to provide an understanding of the causes of poverty, and in turn, the various theories and explanations have been used, to varying degrees, by governments and development agencies to inform relevant policy and actions. Development thinking has centred on the following themes. First, the development record and the experience of many East Asian countries during the 1970s and 1980s indicated that economic growth could lead to poverty reduction. However, it was also found that simply transferring policies (e.g. structural adjustment and neo-liberal programmes) from one region to another was not always workable. Therefore future policy to promote economic growth for poverty alleviation would have to take account of a full range of factors (e.g. political stability, markets, investment climate etc) on a country-specific basis. Second, following further research into the mechanisms of poverty (e.g. impact assessments of the SAP in Africa), investigators such as Sen concluded that a person’s or household’s capability to access economic benefits is crucial in determining vulnerability to poverty, and this will be determined by their position in society (or entitlement). In other words, starvation could not simply be equated with food shortages (a production problem), but could equally be a consequence of a lack of purchasing power (a trade/exchange failing). Building upon this work, the emergence of new, broad-based and multi-disciplinary approaches to poverty analysis (e.g. sustainable livelihoods approach) have opened up a wide debate on how poverty should be measured, assessed and deal with. Third, there has been an increasing level of political attention and financial commitment to international development and poverty reduction in the past five years leading to the adoption of the Millennium Development Goals and the Poverty Reduction Strategy Paper approach by most governments and international agencies. There is also an on-going debate over the elements that should be at the centre of any sensible poverty reducing strategy. The topic of ‘pro-poor growth’ (the average growth rate of the incomes of the poor – the absolute definition) has also emerged. While there is ongoing research into its meaning and application, there seems to be a general consensus in a few areas: D-14
  • 16. - growth is fundamental for poverty reduction, and in principle growth as such does not seem to affect inequality; - growth accompanied by progressive distributional change is better than growth alone; - education, infrastructure and macro-economic stability seem to positively affect both growth and distribution of income. It is interesting to note that the absolute definition of pro-poor growth is an income- defined measure of poverty status, and that it only considers the incomes of poor people. DFID explains that the pro-poor banner is useful because it aligns economic growth with changes in the well-being of the poor. Also that most policies that increase growth also reduce poverty and many policies that are effective for reducing poverty also increase growth. 3.3. Economic Growth and Fisheries There is widespread agreement that economic growth is a necessary condition for poverty to be reduced in an economy. It is not, however, sufficient since there is a need to ensure that the opportunity that such growth provides does, in fact, translate into poverty reduction. Economic theory and empirical evidence suggest that government macroeconomic policy is an important determinant of economic growth. Among the most important factors identified are: • Free trade • Stable prices • Private enterprise • A well-educated and healthy labour force • Diversified exports without the dominance of a few primary products These macroeconomic factors are beyond the scope of a single sector of the economy such as fishing, so the key question is: how best can the sector contribute? The answer to this question is complicated by a number of factors. First, economic growth is clearly not the only macroeconomic objective, and Governments may decide, or have no choice but, to pursue other priorities, such as the immediate need to provide livelihoods for the poor. Second, even where it is chosen, economic growth is a demanding target, particularly in the case of poor developing countries. There is now broad acceptance around the world and across the political spectrum that growth requires market-based economic and institutional reform and implementing such reforms is challenging. The main difficulty is that many of the policies that promote economic growth are effectively investments in the sense that they involve some sacrifice now in return for a gain in the future. They may therefore worsen the Government' performance s concerning other policy dimensions, for instance changes in economic structure may cause substantial short-run unemployment. Moreover, such investments will pose the social welfare problem that some people will gain and others will lose. Those who D-15
  • 17. expect to lose will resist change, and being a relatively small identifiable group, each of whom stands to lose significantly, they may well be able to organise themselves into an effective political lobby group. Implementing economic growth policies is not likely to be politically easy therefore. In the case of the fisheries sector, two of the factors determining economic growth performance have particular significance. First, there is the issue of free trade and its corollary the liberalisation of trade, and second, there is the issue of dependence on natural resources and primary products. Liberalising trade to move towards free trade is recognised as a general factor favouring economic growth. However, in the case of fisheries, the impact of such liberalisation depends crucially on the fishery management structure in place. Many fisheries around the world remain in conditions that approximate to free and open access. In such cases, it can be demonstrated that liberalising trade is likely to have perverse, counter-intuitive impacts. In particular, the fish-exporting country is likely to lose from liberalisation. Only if both the fish-exporting and the fish-importing countries have economically rational fishery management systems in place (examples of such systems are discussed in the next section) will trade liberalisation be unequivocally beneficial. The second difficulty is that economic research suggests that heavy dependence by countries on natural resources, such as fish, reduces economic growth (regardless of how dependence is measured, e.g. % of GDP, % of exports). A number of explanations have been put forward to explain this somewhat surprising result. In the case of fishing, the most plausible explanation seems to be simply the fact that until recently almost all of the world' fisheries were very poorly managed from an s economic point of view. Maximising the contribution to economic growth requires therefore two related steps. First, the focus of fisheries management must be placed far more centrally on the issue of economic efficiency in the exploitation of fish resources. Second, the way in which economically-rationally-exploited fish resources can contribute to growth needs to be clarified. Whether maximising the economic growth potential of fish resources also maximises their contribution to poverty alleviation is a slightly different question. 3.4. Fisheries Development and Management The previous section argued that economic growth is necessary, although not sufficient, for poverty reduction, and that economically rational fisheries management is necessary, although also not sufficient, to maximise the contribution of fish resources to economic growth. This section discusses the problem of economically rational fishery management. If fisheries are not managed, and access to them remains free and open, then they will be overexploited. This overexploitation arise first in its economic dimension of D-16
  • 18. overcapacity. If economic conditions permit (prices high enough relative to fishing costs), overexploitation will also occur in its biological dimension of overfishing (defined for instance as fishing beyond maximum sustainable yield – MSY). The reason why such overexploitation occurs is because the fish resource is a valuable capital asset. The implicit return on this asset is called the resource rent. Under conditions of free and open access, this resource rent is perceived by fishers to be profit, and drives overexploitation of the fishery. Over the years, fishery management systems have often focussed on the overfishing dimension of the overexploitation problem (to the extent of it being widely argued that fisheries that are not overfished require development rather than management). This focus has led to worsening of the overcapacity problem. The key issue for fishery management success is resource rents, and to prevent them from leading to overexploitation requires that either access no longer be open, or that it no longer be free (or some combination of the two). As well as explaining overexploitation, resource rents are a crucial indicator in fisheries. They measure on the one hand the cost of fishery management failure and on the other the potential contribution of the fish resource to economic and social welfare. It is very surprising therefore that so few estimates of resource rent are available. One reason perhaps for the lack of such estimates is that in order to be able to calculate resource rents meaningfully, fisheries must be organised into fishery management units - FMUs (that is, a fish stock, or group of stocks, associated with the fishers, or groups of fishers, that do or might exploit them). This kind of approach was promoted by the FAO in the 1980s but its implementation has been very gradual, although there are some signs that it may be speeding up following success in some countries. This emphasis on FMUs contrasts with an approach of great importance in relation to the topic of fisheries and poverty reduction. A standard approach has been to identify small scale fisheries (SSF or artisanal fisheries as they are sometimes called) and to argue that they require special treatment. However, although the intentions underlying this approach are laudable, the outcome generally is to disadvantage SSF. The big problem is that they have no interface with other groups of fishers and find it difficult to establish and to protect their rights. The FMU approach on the other hand sees SSF as one among many production technologies within a unit. They can be managed either on the same basis as other groups within the unit, or may be given special treatment if it is felt that they must be protected for some reason. There are few fishery management systems that allow the issue of resource rents to be dealt with. Under free and open access, the rents are dissipated, going to fund unnecessary capacity or simply being lost as fish stocks are run down. An economically rational management system then is one that allows resource rents either to be capitalised in some way or to be extracted. Capitalisation of resource rents can occur under use right systems. Two broad use right systems exist (each with many possible variations) based either on catch or on D-17
  • 19. fishing effort. The best known example of the former is the individual transferable quota system and of the latter, vessel licences. In both cases, resource rents will be capitalised into the price of the use rights (i.e. the price of an ITQ or the price of a vessel licence, assuming that they are transferable from one fisher to another). In principle, catch and effort systems are equivalent. In practice, they differ. In some fisheries it may be practically impossible to control the catch (too many landing points, too many outlets for the catch) so there may be no option but to adopt effort control. But where it can be adopted catch control is to be preferred. The reason is that it is not possible to control all dimensions of effort so one or two dimensions have to be chosen as proxies (e.g. vessel numbers and engine power). The problem is that fishers will be given an incentive to expand the use of uncontrolled inputs to replace the controlled ones in the production of effort, and effort-based management tends to become therefore an ongoing race between the managers and the fishers. Despite differences, in both cases resource rents will be capitalised into the price of rights. If for instance resource rents were to increase, fishers would still seek to expand their catch (as they would under free and open access) but to do so legally they will have to purchase use rights, driving up the price of these. The use of co-management may help the operation of both ITQ and licensing systems. Community-based management is one form of co-management that is put forward as a possible solution to the fishery management problem. But such schemes are largely institutional, the choice of management instruments is no different under them and the problems faced are similar, although they may help to ensure compliance. An alternative to use rights, either individual or communal, is taxation. Rather than attacking the free and open access problem through the open part of the problem, taxation does so through the free part. By correcting fish prices, taxation can force fishers to take into account the cost of using the fish stock. In this way resource rents can be extracted. It is difficult however to use taxation as the sole management method. An ideal economically rational management scheme probably has elements therefore of use rights and taxation within a fishery management unit framework. A proportion of resource rents will be capitalised into the price of the use rights and a proportion will be extracted. In this way fish resources can contribute to economic growth by adding to the process of capital accumulation. The capital made available can be used to undertake investments to help the poor. One advantage of this approach is that the target group of poor people is independent of fish exploitation itself. Some economic growth benefits will also come through the fishing activity itself, although such benefits may not necessarily be concentrated on the poor. The main poverty- related benefits will appear through potential to fund pro-poor growth This economic-growth-based approach can be contrasted with an alternative approach which is to use to resource to provide activities (employment, livelihoods, incomes) for poor fishers. In very poor countries, or very poor regions of poor countries, there may be little choice but to follow such a strategy. And once it has D-18
  • 20. been followed for a while, the Government may become locked into it, because the number of people involved may become very great. Although providing some benefits to the poor, this approach creates poverty traps. The target group for such a policy is necessarily poor fishers only (the poor in the rest of economy are excluded from benefiting from valuable fish resources but it is not clear why). There is also a clear limit to the policy, in that not everyone can be a fisher, so that eventually choices will have to be made, even within the target group. The point should also be made that the second broad policy approach has often been chosen by default, being the consequence of fishery management failure rather than the desired result of government policy. The first policy approach (based on growth) might be seen as the opportunity cost of the second, but because few estimates of foregone resource rents are available this cost is usually unknown. Where the activity-based approach has arisen by default or is no longer considered desirable, the policy problem will be how to move from one approach to the other. The transitional period may be very difficult, especially if the activity-based approach has been pursued for a long period of time. Amongst other things, the case studies will provide empirical evidence on use of the two broad approaches. They will also provide evidence of the policy options for moving from activity-based to growth-based strategies 3.5. Policy and governance In most countries, economic structure and the policy environment do not remain constant. Even with respectable rates of growth, the total number in poverty can increase. And it has done so in many countries because of adverse changes in economic structure and the absence of appropriate policies by government. In simple terms, growth does not help the poor unless it reaches the poor. Nor does government help unless the poor are the beneficiaries of public policies. The design and implementation of appropriate policies for economic growth, development, poverty alleviation, natural resource management, fisheries, management and other areas are major challenges in developing countries. In recent years, an increased level of research activity in the policy domain in general has provided a better understanding of how success can be achieved, or in other words, how the performance of policy can be increased, measured against stated objectives or other relevant indicators. An important entry-point for research has been to consider and further develop the definitions and concepts which underpin this domain, principally - policy, the policy process and governance. Policy can be defined as a course of action proposed or adopted by those with responsibility for a given area (usually government) and expressed as formal statements or positions. The linear (or rational) model presents policy-making as a problem-solving process which is rational, balanced, objective and analytical. It is assumed that policy-makers approach the issues rationally and carefully considering D-19
  • 21. all relevant information. Policy can also be viewed as the ‘policy process’, which is not linear, at all, and incorporates a certain fluidity between decision-making, knowledge and the operationalisation of policy. It can also be thought of as a broad non-linear course of action, consisting of a web of inter-related decisions which evolve over time during implementation. Policy is increasingly seen as an inherently political process, rather than simply the instrumental execution of rational decisions. Governance can also be defined in different ways. At one level, governance is the manner in which power is exercised in the management of a country’s economic and social resources. Governance also refers to the whole array of processes whereby elements in society (government and non-government) wield power and authority, and influence and enact policies and decisions concerning public life, and economic and social development. The close association between ‘governance’ and ‘government’ is an important entry- point for considering the role of government, the nature of the state and the impact on policy-making and implementation in different countries throughout the world. It also focuses attention on the terms ‘good governance’ and ‘strong and weak states’. In simple terms, some countries are classified as ‘Developed Countries’ and some as ‘Developing Countries’. Reynolds (1999) after surveying more than a century of comparative development experience in 40 developing countries concluded that ‘the single most important explanatory variable [of development] is political organisation and the administrative competence of government’. A proper use of public resources and donor transfers appears to be a good indication of good governance. A government’s impact on development is not simply a function of fiscal resources, but also a more intangible thing which one can call the ‘quality of government’. Policy analysis, at all levels (international, national, meso and local), attempts to assess (e.g. have stated policy objectives been achieved?) and evaluate (e.g. what factors have affected implementation?) the performance of policy. This is not an easy exercise given the associated complexity. However, with regards to the relationship between natural resource management (e.g. fisheries management) and the impact on livelihoods and poverty alleviation, recent research has helped to identify and understand a range of important issues which affect policy performance, as follows: - recognition: is the value of the natural resources sector valued by policy-makers? - information/assessment: does this support policy and management decisions? - policy narratives: is there an appropriate conceptualisation of the relationships, development pathways and options? - nature of the policy process: is it dynamic, active and willing to adapt and take hard decisions? Is it transparent, evidence-based and accountable? - participation: do all relevant stakeholders contribute to policy design and implementation (through management systems)? - laws: is there a well-established legal framework? (as a basis for rights and actions?) - institutions: is there an appropriate institutional framework (rules and organisations)? D-20
  • 22. - management capacity: is there an appropriate capacity to manage the natural resources system (technical, financial capacity)? - political will/desire: is there sufficient political will/desire to manage natural resources effectively? Finally, given the range of factors which can affect the performance of policy in important and inter-related areas of natural resource management, economic growth and poverty reduction, where should the emphasis be placed for future work? Three areas appear to be particularly important (from the international literature): - to raise the profile of the ‘environment’ and ‘natural resources’ (re: Millennium Development Goal 7) within the Poverty Reduction Strategy Papers process; for fisheries, there is a need to clarify the role of the sector in national development strategies, and to better understand the level and pathways of benefits flows; - to develop analytical frameworks linking NR to economic growth and poverty alleviation, incorporating a full range of factors affecting policy, at different levels and over time; in fisheries there is a need to broaden the analysis relevant to planning and management, with particular reference to fisheries as a source of wealth for economic growth and poverty alleviation; - to define appropriate policy recommendations and methods of operationalising policy relevant to maximising the contribution of the environment and natural resources to development and poverty alleviation; in fisheries, the key issue is how to improve fisheries management performance in this respect. D-21
  • 23. 4. CASE STUDY TEMPLATE Template for Case Study Country Reports (i) General instructions This template outlines the main issues that case study reports should address. It is intended to help the orientation of the reports but is not intended to be a straightjacket. Where necessary, case study authors may develop other areas that are of particular relevance to their country. In that case, IDDRA should be kept informed so that it is possible to check the relevance for the other cases. (ii) Purpose The purpose of each case study is: - to present, for each the case study country, empirical evidence concerning the impact of past and present fish resource exploitation and utilisation patterns for economic growth and poverty reduction - to analyse the potential contribution of fish resources to economic growth and poverty reduction under different (improved) exploitation and utilisation patterns in the future - to provide a measure of the economic (opportunity) cost of past and current policies (in terms of foregone resource rents) - to identify data gaps and thereby identify priority areas for data collection and research in the future - to identify policy gaps and thereby identify areas for policy reform in the future (iii) Important methodology considerations Each country report should try to follow the structure consisting of five sections as shown below. For each section you should consider carefully the objective of the section, the variables to be considered and the types of information which should be included. It is also important that each case study author should carefully consider the information upon which the case study is based. In advance of collecting and using information relevant to the study, it is worthwhile spending some time reviewing: - the possible sources of information – for example, formal records and documents (e.g. government reports), formal and informal documents from projects (e.g. project survey reports), key informants (e.g. government officials or experts), and community leaders (e.g. heads of fishing groups or communities); - the likely gaps in the records, and the quality and reliability of the information which is available; - the best way of making such assessments about the information base, and developing a strategy for dealing with any weaknesses. For example, for any specific issue, such as the contribution of fisheries to employment or income, it is advisable to obtain estimates from a number of sources (government records, D-22
  • 24. project records, NGOs etc) and then compare them. If the estimates are not a good match, then it is important to investigate the reason for this, and try to decide what is the most reliable estimate based on additional sources such as expert opinion; It is also important to consider how each particular section below (1-5) relates to the ‘key issues’ which have been identified and discussed by the study methodology report (and presented in detail in the report appendices). As indicated in the methodology report, the current study aims to focus on a broad range of issues relating to fisheries management and economic development (poverty), as opposed to more conventional analyses of fisheries management which tends to emphasise fish stock management and biology-based approaches. Therefore, one of the major challenges which you will face in producing your report is to integrate conventional analyses of fisheries management in your case study country (which will be widely available through official reports) and the set of key issues identified in the study methodology. The five sections which should make up the case study reports (and which can be supplemented by additional appendices) are as follows: 1. BACKGROUND (2 to 3 pages, A4, 12 point, single-spaced) Objective: to provide a general profile of the country (national context); based on most recent statistics / information and with an indication of trends where possible; Possible Information sources: Official Government Reports, World Bank country profile document; or a World Bank Poverty Reduction Strategy Paper; Key questions / variables to cover might include: - history, structure and nature of government and national politics; - important national policy priorities; - Population (date of census) - Population growth rate (value%). Is it increasing, decreasing, stable? - Differences between rural and urban areas? Also coastal areas? Are people coming to the coast? Where are the large cities? - Economic structure: importance and growth rates of different sectors - Unemployment - Balance of payments - Indicators of national characteristics and development status (political, social, economic, Human Development Index) Notes: this should be a brief section, use summary tables and graphics where possible; include more detailed statistics information in appendices to the main report; where appropriate identify the reliability of the statistics / information used, if possible; D-23
  • 25. 2. POVERTY (3 to 5 pages) Objective: to examine the poverty status of the case study country; to explain the reasons for poverty; and to give an account of the relationship between poverty and the fisheries sector; Possible Information sources: Government Reports; National Statistics; Reports of Research Programmes and Development Agencies; Reports from NGOs; Multi- Lateral donor documents (e.g. WB-PRSPs); Fisheries Sector Reports and Research Programmes Reports; Key Variables / Questions which might be covered: - How is poverty defined in your country? - What proportion of the population is estimated to be living in poverty on the adopted definition? How is this figure changing over time? - Which economic sectors and/or regions are most affected by poverty? What are the factors that explain this? (Are there any specific empirical studies that look at these factors?) - Report on any studies that have been undertaken of poverty in general; and also any studies which have looked at poverty in the fisheries sector. Notes: The overview of poverty measurement methodology, results and analysis presented in Appendix A1 will provide an initial guide to the types of issues and information important for this section. However, it is likely that poverty assessment in the different case study countries will vary, and the case study authors should try to highlight any issues specific to their country. 3. ECONOMIC GROWTH (3 to 5 pages) Objective: to examine the nature and patterns of economic growth of the case study country, and the contribution of the fisheries sector; Possible Information sources: Government Reports; National Statistics; Reports of donor and other international organsaitions; Key questions / variables to cover might include: - What are the contributors to economic growth? - GDP per capita (1980, 1990, 2000, or series) - What is the fishing sector contribution to GDP, to exports and to other key economic indicators for your country D-24
  • 26. - How is the fishing sector defined for these purposes (marine fish catching, inland fish catching, aquaculture, fish trading, fish processing) Notes: An overview of economic growth and the relationship to the fisheries sector is provided in Appendix A2, and raises a range of important issues relevant to this section including the importance of effective fisheries and the difficulty of measuring the contribution of environmental resources to economic growth. Each case study author should try to consider these types of issues within the context of their case study country. 4. FISHERIES DEVELOPMENT AND MANAGEMENT (5 to 10 pages) Objective: to examine the role of fisheries in development by analysing both fisheries exploitation (or activity-related) benefits and wealth-related benefits; Possible information sources: Government Reports; Official Statistics; Reports from Research Programmes; NGO Reports; Expert Interviews; Interviews with Community leaders; Interviews with industry leaders; Key questions / variables to cover might include: - What are the principal fish resources? - What are the landed values? - Give the historical trends if possible? Fisheries exploitation or activity-related benefits - How many people are employed catching fish? Can this be broken down by fishery? - What is the average wage of these people? And the variability in wages between fishers and over time? - How does this compare with the average wage for comparable activities (define these activities) - What other activities are undertaken with respect to fishing? - trading - processing - other specify - How many people are employed in each activity? Breakdown women and men - What are average incomes and their variability for each activity? Breakdown for women and men - Do fish resources play a role in food security? If so, how? How many people are affected? How is the number changing over time? D-25
  • 27. - Are fish resources used to provide subsistence livelihoods? If so, how many people are involved? How is the number changing over time? Wealth-related benefits - Are fisheries managed on a fishery management plan basis? If so, how are the Fisheries Management Units (FMUs) defined? - What are the main FMUs? - Has resource rent been estimated for any fisheries? If so which? What are the results? - Is access limited (restricted) for any fisheries? If so which? How is access limited? How do new entrants enter the fishery? - If use rights exist, are they traded? What information is available on their price? - How much revenue does the Government generate from fishing? What proportion comes from domestic fishing? How is it raised? What proportion comes from foreign fishing? How is it raised? Notes: An overview of some of the key issues relevant to this section is provided by Appendix A3. Special emphasis is given to the importance of empirical information to inform the analysis of different fisheries management approaches (re: management which focuses on activity-related vs. wealth-related approaches). Case study authors should recognise the importance of this empirical information, and attempt to secure relevant and high quality data (a key part of the study overall). 5. POLICY MAKING (5 to 10 pages) Objective: to examine the policy context, policy frameworks and policy processes relevant to fisheries management and economic development (poverty alleviation) in each case study country; Possible information sources: Government Reports; Research Publications; Donor and international organisations reports; NGO publications; Key interviews with Government staff; Key interviews with actors in the fisheries sector; Key interviews with other policy experts; Key questions / variables might include: - How is poverty issue addressed at macroeconomic level? (Is there a Poverty Reduction or Eradication Plan) - What other policies have been applied to address poverty? (e.g. Factor and product market policies? Pro-poor spending on infrastructure? Policies to direct patterns of growth?) D-26
  • 28. - What are the government’s objectives? - Which organisations (Government, non-Government, civil society) are responsible for the design and implementation of policies and instruments for poverty reduction? - What are the main instruments being used? - What evaluations have been undertaken of these policies and instruments? How successful are they judged to have been? What factors explain their success or otherwise? - How does the fishing sector figure in the policy? Is it specifically mentioned in the PRSP or similar? - How does the view of the fishing sector differ between different Ministries (e.g. fisheries versus finance) and how are conflicting views reconciled? - How is linkage between fish resources, economic growth and poverty reduction articulated to policy makers? - What socio-economic studies have been undertaken of the fisheries sector and how are the results implemented in policy terms? - What role is played by NGOs, fisher and other organisations and civil society in general? - What factors affect the participation of poor people in economic growth activities, policy-making and implementation? - Are there any data or research gaps relevant to improved policy-making that need to be addressed? - What are the important areas for policy development in the future with reference to the linkage between fisheries, economic growth and poverty reduction? (opportunities) - What factors are likely to impact on the nature and rate of policy development in these areas in the future? (constraints) Notes: An overview of issues relevant to policy and governance is provided in Appendix A4, and it is important to recognise that policy analysis for many fisheries in relation to economic development (and poverty reduction) is very limited in most countries. Case study authors may have to draw upon a wide range of information sources (and to triangulate between them) in order to produce a succinct overview of the policy framework (in general) and the factors which affect policy performance. D-27
  • 29. 5. CASE STUDY TERMS OF REFERENCE The UK Department for International Development (DfID) seeks to increase the contribution of fisheries to reducing poverty, by encouraging decision makers to adopt policies and measures that can be integrated in practical ways into broader poverty reduction processes. To this end, it has commissioned IDDRA to undertake a study to identify the links between poverty reduction and fisheries development under different policy arrangements An important part of this study is a number of case studies which will provide empirical evidence on the role of fisheries in supporting growth and poverty reduction. The case studies will be undertaken in close collaboration with IDDRA staff. Case study authors will make the following contributions to the overall study: 1. Comment on the background document, produced by IDDRA, which outlines the main issues in linking fisheries exploitation and poverty reduction. Comment in particular on the proposed template for the case study reports, which is included in the background report as section 4. On the basis of comments received, IDDRA will finalise the background report and the template. 2. On the basis of the finalised template (attached), write for their case study country a report of between 8,000 and 10,000 words, supported by appendices where appropriate. 3. Provide, where they are in the public domain, copies of key source documents (e.g. PRSP or parts thereof relevant to fisheries, Fishery sector strategy document, Fishery management plans for key fisheries, Studies of rents in key fisheries, .....). Ideally, these documents should be provided in electronic format (Word or scanned). 4. Read and comment on the synthesis report and policy brief produced by IDDRA using the background document and case study material. Timing Case studies will be commissioned as soon as possible following receipt of comments and finalisation of the background report and template. Case study authors should provide a FIRST INTERIM PROGRESS REPORT BY 7TH MARCH 2005. This report should include a status report on the work in progress, annotations of the template and indications of available background material. It would be useful if copies of the material referred to in point 3 above could be supplied by this date. Case study authors should provide a COMPLETE DRAFT REPORT BY 31 MARCH 2005, plus copies of the material referred to in point 3 above. D-28
  • 30. Where necessary any revisions to the complete draft report must be completed by 30 APRIL 2005. D-29
  • 31. 6. CONCLUDING REMARKS The current report is the main output of Phase 1 of the DFID/PASS project ‘The Role of Fisheries in Poverty Alleviation and Growth: Past, Present and Future’. As a background document to the study, it provides an overview of relevant conceptual, theoretical and empirical information in four areas – poverty and development, economic growth and fisheries, fisheries development and management, and policy and governance. This information is summarised in the main body of the report (underpinned by more detailed appendices) and is used to develop a methodology in the form of a template for a series of national case-studies. The information presented draws upon on a broad range of literature. This was considered important in order to provide a good basis for research into the role of fisheries in poverty alleviation and growth (the key objective). It is intended that the research should be informed by both fisheries and non-fisheries elements and perspectives, with the eventual outputs having implications for the fishery sector and other common pool resources, in terms of ensuring pro-poor growth. The next phase (2) of the project will involve national case-studies implemented in eight developing countries using the study template. The resulting studies will be synthesised into a main report and used to produce a policy brief by June 2005. D-30
  • 32. APPENDICES D-31
  • 33. A1: POVERTY AND DEVELOPMENT – EVOLVING CONCEPTS AND APPROACHES A1.1. INTRODUCTION AND OBJECTIVES Poverty is a major global problem, with half of the world’s population living on less than $2/day. In the World Development Report (2000), the World Bank recognised poverty elimination as the “world’s greatest challenge”. The Organisation for Economic Cooperation and Development (OECD) has proposed the international development target of reducing by half the proportion of people living in extreme poverty by 2015. International development agencies have responded with a wide range of new plans and interventions, making poverty alleviation the new priority agenda for these organisations. In parallel, debate and discussion, and research into key poverty issues has also increased, covering areas such as poverty measurement, the identification of the poor and their characteristics, and the investigation of best policy approaches and interventions for poverty alleviation. This has included an attempt to build upon related concepts and ideas – for example, what is the relationship between economic growth and poverty alleviation? – and, the possibility of learning from past approaches – for example, what is the impact of economic structural adjustment programmes (SAP) on poverty in particular countries? An important recent development has been the broadening of poverty definitions and analyses – to explain poverty by looking at a range of factors (economic, social, institutional etc) – and to design interventions accordingly. At the same time, there has been a renewed recognition of the role of economic growth in development, but greater emphasis has been placed on the distribution of benefits as an important factor in poverty alleviation (the concept of ‘pro-poor growth’). In the following brief account, the relationship between the various concepts and ideas, and resultant policy approaches for poverty alleviation which have emerged over the past 50 years will be described. In turn, this will be used to identify relevant research priorities and development approaches, with regards to the role of natural resource management, and fisheries in particular (the focus of the current study). There are three sections to follow. The first section addresses the fundamental question ‘Who are the poor’ by examining the various methods used for measuring poverty. The second section presents some empirical data from a selection of African countries derived from the application of these methods. The third section addresses the second fundamental question ‘Why are people poor?’ and what policy approaches are used for poverty alleviation. A1.2. WHO ARE THE POOR? METHODS FOR MEASURING POVERTY There are three broad categories of methods used to measure poverty – nutrition- based methods, basic needs and composite indicators, and income-based measures – as shown in Table 1. D-32
  • 34. First, in the case of nutrition-based methods, a poverty index can be generated by measuring the extent of food energy deficiency. There are two ways of doing this: (i) direct computation – by recording the energy intakes of individuals relative to requirements (e.g. in 1948, FAO started out by setting an average daily calorie intake requirement for adults of 2,600 calories, an approach which has undergone various refinements since then); (ii) anthropological studies – which compare an individual’s physiological condition with calibrated norms (e.g. for children – underweight condition connected with poor nutrition in the past can be gauged by measuring height-for-weight; for adults, various Body Mass Indices, BMI, are often employed). Overall, nutrition-based methods can give some idea of national malnourishment, but fail to capture the magnitude of the nutritional shortfall. In the case of direct computation, there are various limitations for policy-making (e.g. the measurements represent a ‘snapshot’ of calorie intake at one point in time). For anthropological studies there are also various weaknesses (e.g. it is difficult to compare calibrated norms between countries). Second, the basic needs and composite indicator methods arose in the 1970s in an attempt to reflect that human needs include food, but also health, education, water, shelter and transport (Streeten et al. 1982, p.7). The challenge was how to identify, measure and aggregate appropriate indicators into a common index. Three approaches evolved (i) UN Research Institute on Social Development (UNRISD) Index (1970) which included 19 core indicators forming a composite development index. This was judged to be more sensitive than income-based indices to changes in economic and social conditions, but its principal weakness was that it tried to measure development based on structural change rather than human welfare requirements; (ii) the Physical Quality of Life Index (PQLI) (after Morris, 1979) proposed three key variables as a basis – life expectancy at age 1, infant mortality, and literacy levels. While this index permitted international comparisons, it was criticised for the variables included, and the arbitrary allocation of weightings to each; (iii) the UN Human Development Index (1990) was designed to take into account relative international income levels, and also how such incomes are spent. Computed annually by the UNDP since 1990, it combines proxies for individual living standards (real GDP per capita), longevity (life expectancy at birth) and knowledge (educational attainment). The resulting index figure per country are between 0 (lowest level of development) and 1 (highest level). Overall, the HDI has D-33
  • 35. Table.1: Poverty measurement methodology – an overview (synthesized from Thorpe, 2004) Poverty Method Comments Measurements Nutrition-based Focus: Poverty index by measuring extent of food - overall give some idea of prevalence of energy deficiency – 2 approaches; national malnourishment, but fail to capture magnitude of nutritional shortfall; (i) Direct computation: by recording the energy intakes of individuals relative to requirements: Some limitations for policy-making: - represent a ‘snapshot’ of calorie intake at - FAO World Food Survey (1948): set an average one point in time; daily calorie intake of 2,600/person; - global impact of disease is presumed - FAO WFS (1952): level adjusted down to reflect constant; ‘needs’ in developing countries; - no account of behavioural adaptation to - FAO WFS (1974): minimum nutritional low calorie intake; benchmark of 1.2 Resting Metabolic Rate - underplays importance of nutrients (other (RMR); to prevent stunted growth and health than calories); risks; - FAO WFS (1985): 1.4 RMR for active working - give a general indication of nutrition and life; poverty; - FAO WFS (1996): attempts to integrate info on - some limitations: metabolic rates and anthropometric studies to - majority of studies tend to focus on give robust assessment of nutritional deficiency; vulnerable members of society (due to resource constraints); (ii) Anthropological studies: compare an individual’s - difficult to compare calibrated norms physiological condition with calibrated norms; key between countries; areas: - behavioural adaptation can affect interpretation of results; - children: (I) wasting – low weight for height (starvation); (ii) stunting – low height-for-age (prolonged under-nutrition); (iii) underweight – low weight-for-age (past under-nutrition or current vulnerability); - adults: use of Body Mass Indices (BMIs) Basic needs and Focus: human needs include food, but also health, composite education, water, shelter and transport – problem of indicators how to identify, quantify and aggregate into an index; various attempts: - more sensitive than income-based indices (i) UN Research Institute on Social Development to changes in economic and social (UNRISD) Index (1970) – 16 core indicators forming conditions; emphasis on measuring a composite development index; structural change; - permitted international comparisons; (ii) Physical Quality of Life Index (PQLI) (Morris, criticised for variables included and 1979) – 3 variables: life expectancy at age 1, infant weightings (arbitrary?); mortality and literacy levels; - further extended concept of poverty, but (iii) UN Human Development Index (1990 -) – some weaknesses: (I) some factors not combines proxies for individual living standards (real included (e.g. governance); (ii) weak on GDP per capita), longevity (life expectancy at birth) politics; (iii) data reliability (poor people and knowledge (educational attainment); the resulting really included?); (iv) how are the individual index figure per country are between 0 (lowest level factors weighted? of development) and 1 (highest level). D-34
  • 36. Income-based Background: recent research has re-confirmed the - income based poverty measures reported at measures importance of income-based poverty indicators; Dietz national level are frequently decomposed to and Gibson (1994) have shown a high degree of indicate how poverty levels vary according correlation between GNP per capita and HDI; to place of residence (e.g. urban/rural), Isenman (1980) and Sen (1981) also note the sector of employment (e.g. agriculture, correlation between BN-based indicators and average industry, etc), gender and educational level real incomes; Dasgupta and Wheale (1992) disclose of household head. The resultant poverty that political and civil liberties are positively related profiles enable policy-makers not only to to real incomes per capita; identify which societal sub-groups are vulnerable, but also to assess how proposed Focus: to quantify the number of poverty alleviation measures may impact on individuals/households falling below selected poverty such ‘at-risk’ groups; and destitution lines; - income-based measures (of income Note: 4 key decisions underpin all measures of this shortfalls) also have limitations as a policy- type: (I) how to establish an actual poverty line; (ii) guiding tool: (I) inflation needs to be taken how to identify the extent of household poverty; (iii) into account in determining and re- how to treat non-traded goods and services; (iv) how calculating poverty lines; (ii) provision of to deal with under-reporting or mis-reporting of public goods and services must also be income; treated carefully, and the social value aggregated to reflect the true level of Three measures: household income; (iii) inter-country (i) The Headcount measure: the proportion of the comparisons must be treated with care (e.g. population (persons or households) whose US$1/day is a useful indicator, but cannot be consumption level falls below the specified poverty used to assess progress at the country level line; or guide policy formulation). (ii) The Poverty Gap (PG) measure: quantifies the extent to which a poor person or household falls below poverty line; (iii) Foster-Greer-Thorbecke (FGT) (1984) measure: or the squared poverty gap measure determines income variation amongst the poor; Other measures: Indicators of the dimensions of relative poverty (or inequality) include: - US$1/day or US$2/day measures; - Bottom decile or quintile: proportion of income received by the poorest 10 or 20 per cent; - Top decile or quintile: proportion of income in top 10 or 20 percent; - Gini Coefficient (and Lorenz Curve) from 1 (perfect inequality – one person has all the income) to 0 (income is divided equally amongst all); helped to further extend the concepts of poverty and development, but it also has some weaknesses (e.g. some key factors such as governance are not included, there are questions about the reliability of the underlying data, and the weightings of factors). Third, with regards to income-based measures, according to Thorpe (2004), although the shortcomings of income-based measures (e.g. failure to include non-marketed D-35
  • 37. production and remedy distorted prices) originally spurred attempts to develop complements and alternatives – and led to the emergence of the Basic Needs (BN) approach and the HDI – subsequent research has re-confirmed the importance of income-based indicators (e.g. Dietz and Gibson (1994) have shown a high degree of correlation between GNP per capita and HDI; Isenman (1980) and Sen (1981) also note the correlation between BN-based indicators and average real incomes; Dasgupta and Wheale (1992) show that political and civil liberties are positively related to real incomes per capita). Overall, then, income-based measures aim to quantify the number of individuals or households falling below selected poverty and destitution lines. According to Thorpe (2004), there are four key decisions which underpin all measures of this type: how to establish an actual poverty line, how to identify the extent of household poverty, how to treat non-traded goods and services, and how to deal with under-reporting or mis-reporting of income. There are three main measures: (i) the Headcount measure – the proportion of the population (persons or households) whose consumption level falls below the specified poverty line; (ii) the Poverty Gap measure – the extent to which a poor person falls below the poverty line; (iii) the Foster-Greer-Thorbecke (FGT) measure (or the squared poverty gap measure) – determines income variation amongst the poor. Other indicators of relative poverty (or inequality) can also be calculated including: the ‘US$1/day’ or ‘US$2/day’ measures; income received by the top and bottom deciles of the population; and Gini Coefficient (or Lorenz curve) expressing perfect inequality (value =1) to perfect equality income (value =0). The reporting of income-based measures at national level provide a general overview of poverty for policy-makers. They are also useful when decomposed to indicate how poverty levels vary according to place of residence (e.g. urban/rural), sector of employment (e.g. agriculture, industry etc), gender and educational level of the household head. This profiling exercise can help policy-makers to identify which societal groups are vulnerable and how poverty alleviation interventions might impact on such ‘at risk’ groups. However, income-based measures also have certain limitations for policy-makers. For example, the actual calculations must be transparent to see how factors such inflation and the value of public service provision is treated. In addition, care is needed with international comparisons involving measures such as the US$1 or US$2/day incomes; although these are useful indicators of global progress, they cannot be used to assess progress at the country level or guide policy-formation. A1.3. EMPIRICAL EXAMPLES OF POVERTY MEASUREMENT In this sub-section, empirical examples of the results of poverty measurements, using the methods described above, from an arbitrary selection of countries in Africa are provided by way of illustration. First, Table 2 shows the prevalence of undernourishment (using a nutrition-based method). The countries with highest prevalence are Somalia, Eritrea, Burundi and Mozambique (percentage terms) and Ethiopia, Tanzania, Kenya and Mozambique (absolute numbers). Whilst Benin, Burkina Faso, Ghana, Mali, Mauritania, Nigeria D-36
  • 38. and Senegal have all seen the undernourished proportion of their population fall between 1979/81 and 1995/7, the reverse is true for Somalia, Tanzania, Madagascar, Namibia and Mozambique. Second, Table 3 shows results using the Human Development Index (HDI), its components and the Gender Development Index (GDI). In general, Africa comes out relatively badly under the HDI, with African countries occupying the last 28 places in this global league table. In Table 3, Ghana (119) and Kenya (123) have the highest rankings, and Burundi (160) and Burkina Faso (159) have the lowest. In general, for Africa, Mauritius (63) is highest followed by Cape Verde (91) and South Africa (94). Table 2 Prevalence of undernourishment in a selection of African countries Pop 1996 Undernourishment in Total Population Number Propn Propn Propn 1995/7 1979/81 1990/2 1995/7 Benin 5.5 0.8 36 21 15 Burkina Faso 10.7 3.2 64 32 30 Burundi 6.3 4.0 38 44 63 Eritrea 3.3 2.2 NA NA 67 Ethiopia 56.8 28.7 NA NA 51 Ghana 18.2 2.0 61 29 11 Kenya 27.8 11.4 25 47 41 Madagascar 14.2 5.6 18 34 39 Mali 10.2 2.9 59 30 29 Mauritania 2.4 0.3 35 15 13 Mozambique 17.9 11.3 54 66 63 Nigeria 101.4 8.3 40 13 8 Senegal 8.6 1.5 19 19 17 Somalia 8.5 6.2 55 70 73 Tanzania 30.7 12.3 23 30 40 Notes: Numbers are in millions, Popn are percentage figures. NA or non-availability of information. Source: FAO (1999; Table 1) Table 3 Human Development Index (HDI), its components and the Gender Development Index (GDI) HDI Life Adult Lit Enrol (%) GDP GDI Rank Expect (%) Benin 147 53.6 39.0 45 933 134 Burkina Faso 159 46.1 23.0 23 965 144 Burundi 160 40.6 46.9 19 578 145 Eritrea 148 51.8 52.7 26 880 133 Ethiopia 158 44.1 37.4 27 628 142 Ghana 119 56.6 70.3 42 1,881 108 Kenya 123 51.3 81.5 51 1,022 112 Madagascar 135 52.2 65.7 44 799 122 Mali 153 51.2 39.8 28 753 138 Mauritania 139 51.1 41.6 41 1,609 126 Mozambique 157 39.8 43.2 23 861 141 Nigeria 136 51.5 62.6 45 853 123 Senegal 145 52.9 36.4 36 1,419 130 Somalia - - - - - - Tanzania 140 51.1 74.7 32 501 124 Notes: Life Expect. Is life expectancy at Birth (1995); Adult literacy rate is the percentage aged 15 and above (1999). Enrol. Is the Combined primary, secondary and tertiary gross enrolment ratio for 1999. GDP is GDP per capita (US$ adjusted in PPP terms, 1999), GDI is the Gender-related Development Index. Source: UNDP (2001: Tables 1 and 21) D-37
  • 39. Third, Table 4 presents the most recent income-based estimates for poverty in Africa. At a national level, over half of the populations of the following countries were below the poverty line – Burkina Faso, Madagascar, Mauritania and Tanzania. The converse was true for Benin, Burundi, Ghana, Kenya, Nigeria and Senegal (over 50% population above the poverty line). Interestingly, for all countries, where data were available in Table 4, the level of poverty was higher in rural compared to urban areas. Table 4 Population below the Poverty Line (Most Recent Surveys) Year Percentage below Line Rural Urban National Benin 1995 - - 33 Burkina Faso AAET 68.0 44.3 64.1 Burundi 1990 - - 36.2 Eritrea - - - - Ethiopia - - - - Ghana 1992 34.3 26.7 31.4 Kenya 1992 46.4 29.3 42.0 Madagascar 1993/4 77.0 47.0 70.0 Mali - - - - Mauritania 1989/90 - - 57.0 Mozambique - - - - Nigeria 1992/3 36.4 30.4 34.1 Senegal AAET 49.7 40.9 46.1 Somalia - - - - Tanzania 1991 - - 51.1 Notes: AAET in the year column refers to data sourced from Ali and Thorbecke (2000: Tables A6 and A7); Source: World Bank (2000, Table 4); Fourth, Table 5 presents the poverty measurements for selected African countries compared to International Poverty Lines. Mali and Nigeria have the highest percentage of their populations (70-90%) living below the US$1 and US$2/day lines. Table 5. International Poverty Lines (Relative Poverty) Survey Year US$1 a Day US$2 a Day % Pop Poverty Gap % Pop below Poverty Gap below (%) (%) Benin - - - - - Burkina Faso 1994 61.2 25.5 85.8 50.9 Burundi - - - - - Eritrea - - - - - Ethiopia 1995 31.3 8.0 76.4 32.9 Ghana - - - - - Kenya 1994 26.5 9.0 62.3 27.5 Madagascar 1993 60.2 24.5 88.8 51.3 Mali 1994 72.8 37.4 90.6 60.5 Mauritania 1995 3.8 1.0 22.1 6.6 Mozambique 1996 37.9 12.0 78.4 36.8 Nigeria 1997 70.2 34.9 90.8 59.0 Senegal 1995 26.3 7.0 67.8 28.2 Somalia - - - - - Tanzania 1993 19.9 4.8 59.7 23.0 Source: World Bank (2000: Table 4) D-38
  • 40. Fifth, Table 6 shows the results for Inequality in Africa (income-based). For example, in Nigeria, Mali and Burkina Faso, the richest 10% of the population account for about 40% of total national income/consumption, whereas the poorest 10% account for 1-2% of total national income, with Gini Coefficients of about 0.5 or above reflecting this level of inequality. Table 6. Inequality in Africa Survey Year Poorest 10% Poorest 20% Richest 10% Gini Coefficient Benin - - - - - Burkina Faso 1994 2.2 5.5 39.5 0.482 Burundi 1992 3.4 7.9 26.6 0.333 Eritrea - - - - - Ethiopia 1995 3.0 7.1 33.7 0.40 Ghana 1998 2.4 5.9 29.5 0.396 Kenya 1994 1.8 5.0 34.9 0.445 Madagascar 1997 2.2 5.4 37.3 0.46 Mali 1994 1.8 4.6 40.4 0.505 Mauritania 1995 2.5 6.4 28.4 0.373 Mozambique 1996/97 2.5 6.5 31.7 0.396 Nigeria 1996/97 1.6 4.4 40.8 0.506 Senegal 1995 2.6 6.4 33.5 0.413 Somalia - - - - - Tanzania 1993 2.8 6.8 30.1 0.382 Notes: The Poorest/Richest columns refer to this decile/quintiles share of total income / consumption. Source: UNDP (2001: Table 12) Finally, before leaving this section, it is important to re-emphasise the complexity of poverty measurement. Thorpe (2004) in his overview, leaves this to Szekely et al (2000, p.29) ‘So how much poverty is there…? The answer is that it depends. It is largely driven by the choice of equivalence scales, assumptions about the existence of economies of scale in consumption, the way in which missing and zero incomes are treated, and by the way in which the data is adjusted or not for mis-reporting. It also depends on the definition of the poverty line, on the index chosen to summarise the information, and on other choices…’ A1.4. WHY ARE PEOPLE POOR? AND WHAT POLICIES ARE NEEDED FOR POVERTY ALLEVIATION? The poverty measures presented above provide an indication of the scale of the problem which needs to be addressed. They cannot provide any explanation on why people are poor or why poverty is so significant in particular countries. Clearly, in order to address poverty through specific policy actions, it is essential to understand the circumstances and factors which have led to this state. Since the 1950s, development economists have attempted to provide this understanding, leading to a series of development theories, which have been used to varying degrees by national governments and bi-lateral and multi-lateral assistance agencies to formulate and implement policies for development and poverty alleviation. In the following section, D-39
  • 41. a brief overview will be presented of the evolution of development theory, and the resultant policy approaches which have emerged and have been applied, with particular reference to natural resources, agriculture and fisheries. It is important to note that despite the fact that over 1 billion people are living in poverty today, the past 25 years have also seen unprecedented progress in the developing world. For example, per capita income has doubled, life expectancy has increased by ten years, and infant mortality rates have been halved. However, this overall pattern conceals an extremely uneven pattern of progress – while East Asian countries have made significant progress, 36 countries (19 in Sub-Saharan Africa) are poorer today than they were a generation ago. Thirlwell (1994) proposes that four types of low-income countries (with high levels of poverty) can be distinguished: - countries with low per capita incomes but experiencing rapid progress and with enormous future potential based on indigenous resources; - countries with rising per capita incomes but with less hope of rapid self- sustaining growth because of resource limitations; - countries rich in resources, but with per capita income still relatively stagnant; - countries with a stationary per capita income and with little prospect of raising living standards; From one perspective, this simple classification emphasises that a rise in real national income (i.e. economic growth) is an important basis for development (and the alleviation of poverty). However, in recent years, many development economists have stressed that development must imply more than just economic growth, and should be a sustained secular rise in real income accompanied by changes in social attitudes and customs which have in the past impeded economic advance. Meier (1995) explains that economic development is not simply economic growth ‘Development involves growth plus change, that is, there are certain qualitative dimensions in the development process that extend beyond the growth and expansion of the economy. The qualitative dimensions will manifest themselves certainly as the improved performance of factors of production and new technologies, but also through the development of new institutions, and a change in attitudes and values’ The way in which development theories and associated policies have emerged in the past 50 years has been characterised by a number of re-curing themes, as follows: - the long-time debate over the role and relationship between economic growth and increases in welfare at the national level; - overlapping (and often confusing) definitions and usage of the terms economic growth, development, economic development and sustainable development; - the emergence of ‘poverty’ as a specific topic and policy area; - the difficulty of integrating macro- and micro-level study findings and policy actions; - the varying roles given to natural resources sectors (including agriculture and fisheries) in development and poverty alleviation; D-40
  • 42. It is possible to identify at least eight phases of development theory and policy evolution since 1950. Table 6 provides a detailed overview of these phases with particular reference to agriculture and fisheries policy in developing countries (A detailed explanation of these phases can be found in Neiland 2001). In summary, however, development thinking has centred on the following themes: First, economic growth and poverty reduction – what have we learned from the past? - it was initially assumed that development was synonymous with economic growth, and that economic growth leads to poverty reduction. This seemed to be confirmed by the experience of many East Asian countries during the 1970s and 1980s. In other words, by introducing the policies for economic growth which had worked in E.Asia, to other parts of the world, poverty alleviation would soon follow. This centred mainly on policies for structural adjustment or neo-liberal programmes, designed to promote broad-based economic growth and human capital development, which were supported by the World Bank and IMF. However, despite some initial success, the SAP also attracted widespread criticisms – it was found that a standard SAP policy package could not be easily applied to the countries of the South, especially in Africa where human, institutional, economic and infrastructure barriers were significant; also SAP requires a relatively long transitional period (3-10 years?), with identifiable human costs that inordinately burden the low income groups, in addition to the uncertainly over the linkage between economic growth and poverty reduction in many countries. In other words, could it be assumed that economic growth would be pro-poor in a majority of situations? What other lessons does the development record of the past 50 years reveal? In general, many commentators indicate that there is room for cautious optimism in most situations. The literature (e.g. Grindle, 1991; Lal, 1995; Meier, 1995; and Sutton, 1999) indicates that ultimately the major issue is the quality of government policy-making and the role of politics in determining that quality. There are many dimensions to this relationship, as follows: (i) Political stability: it is difficult to say what type of political regime is best for development, but political instability matters – political instability hinders economic development; (ii) Markets: They appear to be a necessary (but not sufficient alone) for democracy; decentralisation of power in markets prevents political monopoly; (iii) Domestic constituency: Policy reforms depend on the emergence of constituencies (associations of citizens who organise themselves with a common objective in mind); (iv) Strong/weak states: More significant that the strength of the state is the quality of the state-craft (or governance) – the quality of policy decisions, their credibility, their transparency, and the administrative capacity to implement policies; (v) Change: This can occur for various reasons including the rapid emergence of enlightened leadership and technocrats, or the slower and more subtle changes that are possible through the political reform process. D-41
  • 43. Second, access to benefits must complement the generation or availability of benefits - the implementation of the SAP and the investigation of its impact, particularly in Africa, led to a better understanding of the mechanisms by which people and households in developing countries can become vulnerable to impoverishment, or alternatively, how they prosper and capitalise on new opportunities which arise. Fundamentally, the capability to access economic benefits is crucial, and this will be determined by the person’s or household’s position in society. Sen (1981) asked ‘why did people starve in conditions of plenty?’ The answer was entitlement collapse – starvation could not simply be equated with food shortages (a production problem), but could equally be a consequence of a lack of purchasing power (a trade/exchange failing). According to Sen (1981) “A person’s ability to command food…depends on the entitlement relations that govern possession and use in that society. It depends on what he owns, what exchange possibilities are offered to him, what is given to him free, and what is taken away from him” (p.154-155) Building upon Sen’s and other work, the emergence of new, broad-based and multi- disciplinary approaches to poverty analysis, and in particular, the sustainable livelihoods approach and techniques such as poverty profiling, have opened up a wide debate on how poverty should be measured, assessed and deal with. For example, the World Bank appears to have complemented its conventional approach (income poverty) with a more multi-dimensional model based on a capital asset framework, as explained by Radoki (1999): ‘The crucial determinants of households’ ability to achieve increased well-being are their access to capital assets and the effects of external conditioning variables which constrain or encourage the productive use and accumulation of such assets’ (p.322) Third, policy approaches for dealing with the complexity of poverty – there has been an increasing level of political attention and financial commitment to international development and poverty reduction in the past five years leading to the adoption of the Millennium Development Goals and the Poverty Reduction Strategy Paper approach by most international agencies. Lopez (2004) also observes that at the same time ‘there is an on-going debate over the elements that should be at the center of any sensible poverty reducing strategy. Should such a strategy have a growth bias or instead mainly concentrate on empowering the poor to benefit from growth? Is inequality affected in general by growth? How does existing inequality affect the impact of growth on poverty, and how does inequality affect growth? More importantly, which policies should be at the center of a poverty-reducing strategy?” (p.2) The topic of ‘pro-poor growth’ has emerged has emerged in recent years and there is an increasing level of research activity attempting to better understand its meaning and application. Lopez (2004) on the basis of his wide-ranging review ‘Pro-Poor Growth: A review of what we know (and what we don’t)’ reaches the following conclusions: D-42
  • 44. There seems to be a general consensus in a few areas: (i) Growth is fundamental for poverty reduction, and in principle growth as such does not seem to affect inequality; (ii) Growth accompanied by progressive distributional change is better than growth alone; (iii) High initial inequality is a brake on poverty reduction; (iv) Poverty itself is also likely to be a barrier for poverty reduction; (v) Asset inequality seems to predict lower future growth rates; (vi) Education, infrastructure and macroeconomic stability seem to positively affect both growth and distribution of income; Lopez continues ‘Beyond this, there seems to be little agreement. We still do not know enough about the potential impact of income inequality and redistribution on growth, and we know very little about the potential impact that a number of policies (trade, financial sector liberalisation, fiscal adjustment among others) have on inequality in general. DFID (2004a/b) in two recent briefing sheets define pro-poor growth (the absolute definition) as ‘…the average growth rate of the incomes of poor people’ (p.1). It is interesting to note that this is an ‘income-defined’ measure of poverty status (as opposed to more broadly-based poverty indicators or approaches). The absolute definition of pro-poor growth considers only the incomes of poor people. DFID (2004) explain that ‘the ‘pro-poor’ growth banner is useful because it aligns economic growth with changes in the well-being of the poor. This helps to build coalitions between developing–country governments, the private sector and donors. In particular, it makes clear that policy-makers do not have to choose between ‘pro-poor growth’ and pro-poor’ policies. The two outcomes overlap because most policies that increase growth also reduce poverty, and many policies that are effective for reducing poverty also increase growth’ (p.3) Another important dimension is that of pro-poor growth and inequality – a preference for the absolute definition of pro-poor growth does not imply that inequality should be ignored in the design of poverty reduction strategies. Indeed, policy-makers should integrate overall growth rate with changes in inequality to find the most pro-poor policy outcomes. So what are the policies needed to raise the rate of pro-poor growth? DFID (2004b) proposes four broad conditions as follows: (i) Create strong incentives for investment; (ii) Foster international economic links; (iii) Provide broad access to assets and markets; (iv) Reduce risk and vulnerability; D-43
  • 45. To elaborate more on these four points, first, private investment is essential for growth, and governments have an important role in facilitating this by providing a stable and secure national context (e.g. by putting in place sound macro-economic policies and protecting legal rights). Second, the integration of the world economy offers opportunities for developing countries, as new markets, business partners, jobs, goods and services become available. Both policy and non-policy barriers (e.g. tariff barriers and transport infrastructure) need to be overcome to promote international trade. Third, people need access to a broad range of assets (human, physical, financial, natural and social), and government can help (e.g. widespread schooling of good quality and access to primary health care increases the poor’s human assets). People also need access to a wide range of markets (e.g. input, consumable and labour markets), and governments can again help to lower the main barriers (e.g. transportation infrastructure and social structures). Fourth, measures are needed to reduce the effects on poor people of risk, vulnerability and adverse personal circumstances. For example, governments can do this by pursuing stable economic policies, or by schemes which broaden access to assets and markets for poor households (helping to smooth out consumption and income). Finally, it should be noted that the four conditions to promote pro-poor growth involve both trade-offs and choices. For example, encouraging international trade may expose rural producers to greater income risks from fluctuating commodity prices. Given limited budgets, governments face hard choices between expenditure on health, education and infrastructure investments. Ultimately, success in achieving pro-poor growth, through these meeting four conditions, will depend on the quality of a country’s governance – requiring strong political leadership, persistence and external support. A1.5. BIBLIOGRAPHY Dasgupta, P. and Wheale, M. (1992) On Measuring the Quality of Life. World Development 20(1): 119-31. DFID (2004a) What is Pro-Poor Growth and Why Do We Need to Know? Pro-Poor Growth Briefing Note 1. (Feb). London: DFID. DFID (2004b) How to Accelerate Pro-Poor Growth: A Basic Framework for Policy Analysis. Pro-Poor Growth Briefing Note 2 (Sept). London: DFID. Dietz, J.L. and Gibson, L. (1994) What is Development?: The Human Development Index: A new Measure of Progress? [mimeo] Fullerton: California State University. FAO (1948) World Food Survey, Rome: FAO. FAO (1974) The Fourth World Food Survey. Rome: FAO. FAO (1985) The Fifth World Food Survey. Rome: FAO. FAO (1996) The Sixth World Food Survey. Rome: FAO. D-44
  • 46. FAO (1999) The State of Food Insecurity in the World. Rome: FAO. Foster, J., Greer, J. and Thorbecke, E. (1984) A Class of Decomposable Poverty Measures. Econometrica 52, 761-5. Grindle, M. (1991) The New Political Economy: Positive Economics and Negative Politics. In: Meier, G. (ed) Politics and Policy-making in Developing Countries: Perspectives on the New Political Economy. San Francisco: ICS Press. Isenman, P. (1980) Basic Needs: The Case of Sri Lanka. World Development 8(3): 237-58. Lal, D. (1995) The Misconceptions of Development Economics. Pp. 56-64. In: Corbridge, S. (ed) Development Studies: A Reader. London: Edward Arnold. Lopez, J.H. (2004) Pro-Poor Growth: A Review of What We Know (and What We Don’t). Washington DC: World Bank. Meier, G.M. (1995) Leading Issues in Development Economics. New York, Oxford: Oxford University Press. Morris, M.D. (1979) Measuring the Condition of the World’s Poor: The PLQI Index. Oxford: Pergamon Press. Neiland, A.E. (2001) A Multi-disciplinary Investigation of Artisanal Fisheries in North East Nigeria with Particular Reference to Resource Management, Economic Development and Policy Analysis. PhD Thesis, University of Portsmouth, unpub. Neiland, A.E. and Bene, C. (eds) (2004) Poverty and Small-scale Fisheries in West Africa. Kluwer Academic Publishers. Radoki, C. (1999) A Capital Assets Framework for Analysing Household Livelihood Strategies: Implications for Policy. Development Policy Review 17: 315-42. Sen, A. (1981) Public Action and the Quality of Life in Developing Countries. Oxford Bulletin of Economics and Statistics 43(4): 287-319. Sen, A. (1981a) Poverty and Famines: An Essay on Entitlement and Deprivation. Oxford: Oxford University Press. Streeten, P., Burki, S.J., ul Haq M., Hicks, and Stewart, F. (eds) (1982) First Things First: Meeting Basic Needs in Deveoping Countries. Oxford: Oxford University Press. Sutton, R. (1999) The Policy Process: An Overview. ODI Working Paper No. 118. London: ODI. D-45
  • 47. Szekely, M., Lustig, N., Cumpa, M., and Meija, J.A. (2000) Do We Know How Much Poverty There Is? Inter-American Development Bank Research Department Working Paper No 437 Washington DC. Thirlwell, A.P. (1994) Growth and Development. Basingstoke and London: The MacMillan Press Ltd. Thorpe, A. (2004) The Nature and Causes of Poverty: An Overview. In: Neiland, A.E. and Bene, C. (eds) Poverty and Small-scale Fisheries in West Africa. Dordrecht: Kluwer Academic Publishers. Pp. 9-36. UNDP (2001) Human Development Report. Oxford: Oxford University Press. UNDP (1997) Human Development Report. Oxford: Oxford University Press. UNDP (1995) Human Development Report. Oxford: Oxford University Press. UNDP (1992) Human Development Report. Oxford: Oxford University Press. UNRISD (1970) Contents and Measurements of Socioeconomic Development. Geneva: United Nations Research Institute for Social Development. World Bank (2000) World Development Report 2000/1: Attacking Poverty. New York: Oxford University Press. D-46
  • 48. Table 6. Agriculture and fisheries development approaches compared, 1950- present AGRICULTURE FISHERIES Pha Approach Point of interest Pha Approach Point of interest se se 1950s I Import Substitution • Prebisch-Singer: “Secular Decline I Expansion of • 1958 1st UN Conference on Industrialisation (ISI) Hypothesis”; fisheries Law of Sea; • Lewis “Two-sector model”; (technocratic, 1960s II Role of agriculture in • Jorgensen on “Agricultural Surplus”; modernist & • Production grows at 6% p.a.; development recognised • “Diffusion model”; productivist) • Discovery of large fish stocks; • Schultz “Efficient but poor • International fish market hypothesis”; grows; • High yielding cereals perform well • Significant technology transfer III Green Revolution in SE Asia; to LDCs; • Significant Aid provided; 1970s IV Radical School • Role of political & institutional • 1973 OAU/NAM approve structures emphasized; 200mile EEZs; • Failure of “trickle-down” • 1977 Numerous countries V Growth-with-Equity recognised; declare 200 mile EEZs; • Research increases; • 1972-73 Anchovetta crashes • McNamara speech on poor; • Basic needs approach; 1980s VI Role of markets/states? • WB re-orientates to economic II Change and • 1982 Convention on Law of growth approach; adjustment Sea adopted; • Government-market axis explored; • 1984 FAO Conference on • State-led development failure Fisheries Development; VII Structural Adjustment recognised • Evidence of global fisheries Programme (SAP) • WB shifts to economy-wide support decline; • Recognition of socio- economic role of artisanal fisheries; 1990s VIII Sustainable • Rio Conference on SD; III New • 1995 FAO Code of Conduct Development, • WTO set up; perspectives for Responsible Fisheries Endogenous Growth • “Anti-development” outcomes • Community-based approaches recognised to management • Poverty alleviation becomes major goal 2000 Sustainable Livelihoods • Holistic approaches, role of capital • Sustainable Fishing & institutions Livelihoods (DFID) Role of NR and Agriculture in Pro-Poor Growth? D-47
  • 49. A2 ECONOMIC GROWTH AND FISHERIES A2.1. INTRODUCTION There is widespread agreement that economic growth is an important, probably the most important, factor enabling poverty to be reduced in an economy. DfID (2004) estimates that many African countries require annual growth rates of 7% if they are to achieve the Millennium Development Goals by 2015. However, although a necessary condition, economic growth alone will not be sufficient since there is a need to ensure that it also contributes to poverty reduction. This view was re- affirmed by the May 2004 Shanghai Agenda on Poverty Reduction, which argued that growth is critical for job creation and poverty reduction but it must be pro-poor and accompanied by investments in poor people through adequate and effective service delivery. Given the importance of economic growth, this appendix looks first at the factors that determine growth and at some explanations why the growth performance of countries has differed through time. It then looks at some growth issues of particular relevance to the fisheries sector. A2.2. THE BIG PICTURE The fundamental economic principles Economic growth is a macroeconomic issue. For many years, the factors that determined economic growth were a settled matter in economics. Broadly speaking, so-called classical economists beginning with Adam Smith argued that growth depended on increasing the quantity and the quality of the three main factors of production: land, labour and capital. But the quantity of land is basically fixed. And increasing the quantity of labour cannot have much impact on living standards because it is output per capita that matters. This leaves two major sources of growth: • Increases in the quantity of capital through saving and investment (capital accumulation) • Increases in the quality of land, labour and capital And the way in which increases could be achieved were through: • High levels of saving and investment leading to capital accumulation • Increased efficiency through division of labour and through free trade (which would effectively increase the size of the market), through education, through technological progress and through laws and institutions. This theory was challenged in the 1950s by the view that economic growth was exogenous. It is not worth going into detail here concerning this theory. In essence, it was argued that many of the factors identified had only a short run, transitory impact and that in the long run, economic growth depended only on population growth and technological progress. It was further argued that both of these factors were not D-48
  • 50. determined by economic factors. The important conclusion was that economic policy was irrelevant for economic growth. This exogenous growth theory held sway for a couple of decades, but by the 1980s was increasingly called into question. In particular, if it were true, how was it possible to explain the divergent growth performance of countries over long periods of time? Gradually, the classical economic theory outlined (very briefly) above was rehabilitated. The main argument was that technological progress is not, in fact, exogenous but depends on a range of economic factors. Hence, it is endogenous, and so is economic growth, meaning that economic policy does matter after all, in exactly the way that classical economists had argued for about 200 years.... Endogenous growth theory, as it is now called, identifies numerous factors determining economic growth that depend on government policy. These factors are all to be found at the macroeconomic level. Among the most important appear to be the following five factors: • Free trade • Stable prices • Private enterprise • A well-educated and healthy labour force • Diversified exports without the dominance of a few primary products Clearly, each of these factors is beyond the scope of any single sector of the economy. When looking therefore at a sector, such as fishing, the question is how best can the sector contribute to macroeconomic goals in order to contribute to economic growth. It must also be recognised that, whilst achieving economic growth is an important macroeconomic objective, governments are faced with other macroeconomic imperatives. In developing countries, these other imperatives may dominate the debate (the need to provide livelihoods for the poor for instance) and the fisheries sector may be used in this way, rather than maximising its potential growth contribution. It is important to recognise however that in many countries, the current state of the fisheries sector is not due to a benign policy intended to help the poor, but rather to the mismanagement of the sector which has resulted in the impoverishment of otherwise wealthy fish resources and the creation of poverty traps for large numbers of poor fishers. There appear to be very few examples of countries where the macroeconomic role of the fisheries sector has been evaluated and an appropriate policy determined. Instead, the history of fisheries management, by and large, is one of fire-fighting, with attempts to conserve the resource base being by far the dominant policy goal. D-49
  • 51. Policy reform and economic growth It is the role of economic theory and empirical evidence to identify the factors that determine economic growth. Assuming that growth is an objective, it is the role of the political process to implement the necessary policy reforms in order to generate the growth. The record of countries is variable in this regard. One reason for the different economic growth performance of different countries is perhaps related to knowledge of the factors determining growth. Following the collapse of communism at the end of the 1980s and the beginning of the 1990s, there has been general acceptance across the political spectrum of the importance of market-based economic and institutional reform for growth. Another reason for different performance is to do with politics. The case of Uganda is instructive. Idi Amin took power in 1971. Taking the level of real per capita GDP as 100 then, by the time that he was overthrown in 1979, after 8 years of economic mismanagement and conflict, the value had fallen to around 65, a decline of one third. His departure did not make an immediate economic difference, and it was only when Yoweri Museveni came to power in 1986 that things began to improve. By 1995, real per capita GDP had reached a level of 87 (on the same index), still 13% below the level it had been in 1970 before Idi Amin took power. The potential for politicians to make a difference, at least negatively, is clearly immense. Another difficulty is that many of the policies that promote economic growth are effectively investments in the sense that they involve some sacrifice now in return for a gain in the future. But there are important differences. With a private investment, it is usually the same person who makes the sacrifice and reaps the gain. In the case of economic growth, however, there is no guarantee that those who make the sacrifice will be those who reap the gain. Macroeconomic growth policy may, for instance, involve unemployment in the short run associated with changes in economic structure. Since most governments have policies in place to deal with unemployment, they may be reluctant to adopt other policies which will worsen their performance, even in the short run, particularly given the election cycle in democratic countries. Governments are faced with the classic social welfare problem that some will gain and some will lose. Although in principle the gainers should be able to compensate the losers, with there still being a net gain, everyone knows that in practice compensation is hardly ever forthcoming. Moreover, in many cases, the losers are a small identifiable group, each of whom stands to lose significantly, whereas the gainers are a large, often unidentifiable group, each of whom stands to make a relatively small gain. As a result, it is far more in the losers interest to organise themselves into an effective lobby group to resist change. Finally, there is the problem that politicians have their own welfare functions to consider. The theory of public choice argues, in essence, that politicians are more D-50
  • 52. interested in pursuing policies that will enhance their own welfare than that of their constituents. There are many reasons therefore why reform leading to increased economic growth may be slow in coming, even if the factors leading to growth are widely recognised. A2.3. ISSUES CONCERNING GROWTH AND THE FISHERIES SECTOR Having looked at the issue of growth from the viewpoint of the macroeconomy, this section looks at two issues concerning economic growth that have particular implications for the fisheries sector. The first is the relationship between liberalisation and growth, and the second is the problem of dependence on natural resources, like fish. Relationship between free trade and growth in fisheries A key issue for economic growth in general is liberalisation, in particular free trade in goods and services. Fishing however is something of a special case. Whilst liberalisation may be a good thing per se, in the case of fishing perverse effects may be encountered depending on the fishery management regime. The issue of liberalising trade in fish products and services has been extensively examined by the OECD. Hannesson' "most important conclusion […] is the critical role of fisheries s management for the effect of market liberalisation, whether it be of trade in fish products, investment, or trade in fishing services" (2001, p.25). The fisheries management system is important because the gains from trade, resulting from liberalisation in either processed or unprocessed fish, will be reflected, to a large extent, in increased (potential) resource rents. The impact of this increase in resource rent will be the same as if it had come from any other source. To begin with, it will show up in the operating profits of the fishing industry, providing an incentive for existing fishers to increase fishing effort as well as for new entrants. The effect of this incentive will depend on the fishery management system. If there is no effective control on fishing effort then, in the usual way, such effort will increase until resource rents are dissipated. If, however, an economically efficient management system exists, then either the increase in resource rents can be extracted or it can be capitalised into the price of a use-right (or some combination of the two). Fishing effort will then increase only to the extent that it is economically rational for it to do so and the management system will thus result in a sustainable increase in the wealth that is generated by the fish resource, and hence a sustainable increased contribution to economic growth. How exactly do the gains from trade liberalisation appear? If trade is to be liberalised, the implication is that there is currently some impediment to trade. An obvious example is a tariff t, in which case fish exporters receive a price p, but fish importers must pay a price p+t. Many other barriers to trade exist (e.g. quantitative D-51
  • 53. import restrictions, sanitary requirements etc) but it is possible to reduce any given barrier to its tariff equivalent. From an analytical point of view, it is sufficient therefore to analyse what happens in the case of tariffs. A tariff obviously opens up a price differential between fish exporters and fish importers. Since exports become more expensive, domestic producers of the same product (or service) are offered some protection, this being the primary purpose of tariffs (although at one time they also served as a revenue generating device for Governments). Trade liberalisation closes the price differential. Generally, it might be expected that prices will rise somewhat in the exporting country and fall somewhat in the importing country. Liberalisation will increase the gains from trade for both importing and exporting countries (the exact share of the gains will depend on demand and supply curves and on other factors such as the relative sizes of the countries). In the case of fish, however, there is not necessarily a gain for the exporting country, if that country does not have an effective fishery management system in place. This counter-intuitive result is not easy to generalise because much depends on the detailed management arrangements in place in the trading countries. Consider first, however, a quite typical case of a fish exporting country that has either an open access fishery, or one which is poorly managed so that access conditions approximate to open access (so-called regulated open access). Trade liberalisation will increase export prices. We know from Appendix 1 that an open access fishery will be overexploited economically (overcapacity) and possibly also biologically (overfishing). The increase in prices will worsen the overcapacity problem, and will also increase the exploitation level which may worsen or begin an overfishing problem depending on the starting point. The fish exporting country is likely therefore to lose from trade liberalisation. What happens in the fish importing country also depends on the fishery management regime that it has in place. If it too operates under conditions of open access, then it will obtain a double dividend. First, it will gain because it will have more fish available at a lower price. Second, it will gain because the lower price of fish will reduce the level of exploitation in its own overexploited fish stocks, enabling them to recover to some extent. Similar results are obtained if the fish exporting country is managing its fishery using an overall quota (TAC) system, without individual quotas. Once the TAC is caught, the fishery is simply closed. Such fisheries are well known for having overcapacity. If trade liberalisation occurs with such a fishery, once again the fish exporting country is likely to lose and the fish importing country gain. In this case, the total catch cannot change because it is constrained by the TAC. But the increase in fish price will attract more labour and capital to the fishery in the fish exporting country. Such increases represent pure waste because no more fish can be landed (because of D-52
  • 54. the TAC limit). All that will happen therefore is that more fishers using more vessels will land the same amount of fish in a shorter time. In the fish importing country, the opposite impact will occur. Fish price reductions will cause a reduction in fishing capacity (in the long run anyway) leading to the available TAC being caught with fewer resources. Once again the fish importing country will get a double dividend, this time in the form of more fish available at a lower price, and a reduction in inputs devoted to fishing. Only if both countries have an economically efficient management regime (eg ITQs, licences or taxation) will standard international trade theory results apply. Where both have efficient regimes, gains to the fish exporting country will come in the form of increased resource rents, because higher fish prices will drive up the price of ITQs or enable higher resource rentals to be levied. The opposite will occur in the fish importing country. Those fishers who compete with the exporting country will find their rents reduced. The fish importing country will still gain from having more fish available at a lower price, but there will be no double dividend in this case. Impact of natural resources and geography on economic growth The importance of natural resources, such as fish, to a country is one of many geographical and other natural factors that may impact upon economic growth. Some factors, such as whether a country is landlocked or not, are clearly beyond the realm of policy, but others such as the extent to which, and the way in which, a country depends economically on natural resources are not. Economic research suggests the following broad results: • Being situated in the tropics tends to reduce a country' annual rate of s economic growth per capita by more than 1 percentage point, ceteris paribus. The main problem seems to be the heat, but the concentration of malaria on tropical countries is also a factor, as is the AIDS pandemic in sub-Saharan Africa. In any event, tropical countries tend to be poor • Being landlocked also tends to reduce growth by about half a percentage point, ceteris paribus. The fact that there are some very wealthy landlocked states (Switzerland for instance) does not alter this general conclusion • Heavy dependence on natural resources (oil, minerals, fish, forests and so on) also reduces economic growth, regardless of how dependence is measured (eg share of the primary sector in total exports or in GDP). The inverse relationship between natural resource abundance and economic growth is at first sight surprising. A number of factors may be put forward to explain it: • First and foremost, many natural resources have a long history of poor management. This is certainly the case of fish resources. Although it is possible to identify examples of successful management, the history of fisheries management over the past 40 years or so is overwhelmingly one of failure. This situation has occurred notwithstanding the widespread D-53
  • 55. move to extended fisheries jurisdiction (200 mile exclusive economic zones). In some natural resources, the problem (from an economic perspective) is one of excessive rent-seeking. In the case of fish, however, as argued in Appendix 1, the primary problem has been the failure to identify resource rents as the main issue for management. • Second, dependence on primary exports may keep the real exchange rate at a relatively high level, preventing the development of non-primary exports and thereby hindering economic growth • Third, heavy reliance on natural-resource-based activities (such as agriculture and fishing) tends to be associated with low levels of saving and investment and low levels of education. The reason is probably that the primary sector needs less human capital than the manufacturing and service sectors. These factors emphasise the need for the rational economic management of the fishery sector (and other natural resource sectors) if it is to make its full contribution to economic growth. The evidence suggests that economic growth is not to be found in the fishing sector itself but in the use that can be made of the resource rents available from a well-managed sector. A related problem is that many countries have not bothered unduly about sustainability issues in the exploitation of their natural resources. For a while this gives the impression that such resources are contributing substantially to economic growth and welfare, but eventually sustainability becomes a constraint. In the measurement of national income, traditional measurement of economic growth tends to be too optimistic because it fails to take into account the way in which natural resources have been depleted in order to deliver the growth. In fisheries, there is a need to develop accounting systems that take into account the sustainable management of fish stocks (and the same is true of other natural resources). Doubtless the best way to do this would be to focus on resource rentals because as argued in Appendix 3, maximising sustainable resource rentals implies a very conservative use of resources. However, it will always be possible to do better than sustainable rentals for a short period of time by running down the capital stock; hence the need for constant vigilance to prevent the "mining" of otherwise renewable resources. Traditional evaluation methods underestimate the importance of environmental resources that are not traded in markets. As a result the economic development of market-based activities has dominated. For instance, the clearing of important habitat for fish and other resources in order to build hotels or develop aquaculture facilities has arisen at least in part because the true economic value of the habitat is difficult to assess, and often has not been assessed at all. In addition to the natural environment, the social and cultural environment also matters for economic growth. Studies highlight infrastructure and good governance (the quality of government institutions, including the absence of corruption) as being important factors for growth. D-54
  • 56. In the case of fish resources and their exploitation, there is both a need for infrastructure development and a potential contribution to it. Where it is sustainable, fishing can represent a core economic activity around which it is possible to develop other economic activities. In Morocco for instance the government has adopted a policy of concentrating small-scale fishing activities in fishing villages along the undeveloped southern Atlantic coast as a way of kick-starting economic development. This policy has led to major infrastructure development, including villages and roads. Clearly, to be successful in the long run, such a policy relies on the sustainable management of the fish resource base, at least until the villages are well enough established that other economic activities can drive them forward in the absence of fishing. Because well-managed fisheries often yield very high resource rents (relative to the costs of fishing), there is scope for rent-seeking of all kinds, including corruption. The management system requires therefore careful institutional design, including appropriate control systems and checks and balances, in order to minimise the impact of rent seeking. A number of countries (New Zealand and Australia for instance) have shown that it is possible to design such systems. REFERENCES AND FURTHER READING Aghion, P. and Howitt, P. (1998) Endogenous Growth Theory. Cambridge, Mass: MIT. Barro, R. (1997) The Determinants of Economic Growth. Cambridge, Mass: MIT. Chenery, H. (1960) Patterns of Industrial Growth. American Economic Review. September. Fisher, A.G.B. (1939) Production: Primary, Secondary and Tertiary. Economic Journal, June. Hannesson R. (2001) "Effects of liberalising trade in fish, fishing services and investment in fishing vessels" OECD Papers Offprint No 8, OECD, Paris, France Harrod, R. (1948) Towards a Dynamic Economics. London: Macmillan. Keynes, J.M. (1963) Economic Possibilities for our Grandchildren. In his Essays in Persuasion. New York: WW Norton & Co. Kuznets, S. (1965) Economic Growth and Structure. London: Heinnemann. Lewis, A.W. (1954) Economic Development with Unlimited Supplies of Labour. Manchester School of Economic and Social Studies 22(2): 139-91. Smith, A. (1976) An Inquiry into the Nature and Causes of the Wealth of Nations. Indianapolis: Liberty Classics. D-55
  • 57. Solow, R. (1956) A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics 70. D-56
  • 58. A3 FISHERIES DEVELOPMENT AND MANAGEMENT – KEY ISSUES A3.1. INTRODUCTION AND OBJECTIVES The purpose of this appendix is: • to explore the reasons why unmanaged fisheries are overexploited • to discuss the biological (overfishing and resource unsustainability) and economic nature (overcapacity and economic waste) of overexploitation • to consider the options available for fisheries management and their implications for overexploitation (focus on wealth generation and distribution) • to assess how fish resources might be used in the interests of the poor A3.2. WHY ARE UNMANAGED FISHERIES OVEREXPLOITED? A simple fisheries model The problem of overexploitation can best be understood using a simple model (Figure 1) of a fishery that combines biological (fish resource) and economic aspects. When undertaking practical fisheries management, more detailed models are needed, but the insights from the simple model remain valid as the models become more detailed. The biological side of the model is described by a sustainable yield (SY) curve. If there is no fishing, the fish stock will settle around its natural equilibrium level and its net growth will be zero. If the fish stock were smaller than this equilibrium level for some reason, then the fish stock would exhibit positive growth, pushing its size back towards the equilibrium level. It is this net growth feature of fish stocks that offers the possibility for sustainable fishing. If the amount of fish caught at a given fish stock size equals the net growth, then the stock size will not change and the situation will be sustainable. As fishing effort increases, net growth, and hence SY, will increase but at a decreasing rate. Eventually a stock size will be reached giving the maximum SY (MSY). If fishing effort increases beyond this point, the fish stock size will be reduced to such an extent that the SY begins to fall, eventually declining to zero if fishing effort is increased sufficiently. The SY curve is shown, in Figure 1, as an inverted parabola. This version of the SY curve is usually called a Schaefer curve after the biologist MB Schaefer who first applied this model to fisheries. Other version of the SY curve are non-symmetrical, the right hand tail declining more slowly than in the case of a parabola, but this does not affect the bio-economic analysis significantly. This SY curve can be used as the basis of a bio-economic model if the price of fish and the cost of catching them is added. To simplify, the price of fish is usually assumed to be constant, in the sense that it does not vary according to the amount of D-57
  • 59. fish caught, the assumption being that the fishery under consideration supplies only a small part of the total market for this species. In this case, the SY curve is easily transformed into a total revenue (TR), since total revenue is price times quantity. And given that the price is constant, it can be standardised to one, so that the SY curve effectively doubles as a TR curve, showing the way in which revenue generated by the fishery as a whole varies as fishing effort increases. Finally, exploitation cost must be added to the model. Again in the interest of simplicity, assume that fishing effort varies by standard vessels being added to or removed from the fleet. The unit cost of fishing effort is then just the cost of one standard vessel, and the total cost (TC) is the cost per vessel multiplied by the number of vessels. In Figure 1, TC is then shown as a straight line beginning at the origin. If per vessel costs increase (decrease) the TC line will swing to the left (right). Figure 1 TC1 MSY Y1 TR SY, Revenue, Cost f1 fMSY Fishing Effort One important point must be noted about the use of cost by economists in these models. The TC line is assumed to include what is sometimes called "normal profit", which may be defined as the return that fishing enterprises must earn if they are to remain in this fishery. From an economic point of view, this level of profit is considered a cost because if it is not met, fishing will no longer occur (in the long run anyway), in the same way that if fishing enterprises do not pay for their fuel, they will not be able to go fishing. This is an important point because it has been, and continues to be, the origin of much misunderstanding of the bio-economic analysis of fisheries exploitation. D-58
  • 60. Putting the TR and TC curves together in Figure 1 allows an analysis of what happens in an unmanaged fishery. The key feature of an unmanaged fishery is that access to the (very valuable) fish resource is left free and open. If TR is more than (less than) TC, then fishing enterprises in the aggregate will earn more than (less than) normal profits, and fishing vessels will enter (leave) the fishery - on the assumption made here that fishing effort changes through changes in the number of vessels. The equilibrium point occurs therefore where TR equals TC, with effort level f1 and sustainable yield Y1. Economists often refer to this equilibrium point as the zero profit level but this is a very misleading use of terminology. It is correct from an economic point of view because profits are defined as being returns over and above normal profits, which as discussed above are included in TC. What is meant therefore is that fishing enterprises are earning only normal profits. Regrettably, those unfamiliar with economics have interpreted "zero profit" through standard usage of the word "profit" to mean the break-even point of the company. As a result, the problem with the free and open access has often been, and continues to be, misunderstood. It would be better if the free and open access equilibrium were referred to as the zero resource rent level (and not the zero profit level). Resource rents and the nature of overexploitation The fish resource is clearly a valuable asset upon which fishers rely, in the same way as they rely on other assets, such as fishing capital, or fishing gear. Under conditions of free and open access, there is a big difference between the different assets however. For assets such as outboard motors, fishers either own them or pay the owner in order to be able to use them. In the case of the fish stock, neither of these situations exists, fishers neither own the stock nor do they pay anyone to use it. Under such circumstances, it is hardly surprising that the fish stock is overexploited, but in what sense exactly? Suppose that in Figure 1, costs are given by the line TC1. Under free and open access, equilibrium will occur with a fishing effort level f1 where TR equals TC. It can be seen however that for fishing effort levels between zero and f1 TR exceeds TC. The vertical difference between TR and TC at each level of fishing effort (and the corresponding stock size) shows the implicit value of the fish stock. This value is called the resource rent. If the fish stock were owned by someone who were leasing fishing rights to fishers (in the same way that some people own outboard motors that they lease to fishers), the resource rent is the amount that they could charge at each exploitation level. Alternatively if the fishers owned the resource themselves, the resource rent is the return that they would get from ownership. D-59
  • 61. Under free and open access, because no one owns the fish resource, it appears as a free good and the implicit resource rents appear to be excess profits to fishing enterprises. As a result, excess capacity is attracted into the fishery until all resource rents are dissipated and the zero resource rent equilibrium emerges. The economic nature of overexploitation is therefore the problem of overcapacity. The point where the difference between TR and TC is maximised is called the maximum economic yield (MEY). In Figure 1, because of the parabolic shape of TR, the MEY level of fishing effort is half of the open access level. In this case therefore an unmanaged fishery will end up with twice the amount of capacity that it really needs. Another point may be noted about Figure 1. With the TC line TC1 the unmanaged fishery is exploited below the MSY level. This is important because MSY has often been used to define biological overexploitation. A fishery that is exploited with fishing effort in excess of the level needed for MSY is said to be over-fished. And whilst fishing effort remains below the MSY level, the fishery would be considered to be under-fished. The biological view of overexploitation revolves therefore around the concept of overfishing. In the case shown by Figure 1, there would be no biological need for management. In fact quite the opposite would occur. Attempts would be made to develop the fishery so that exploitation levels would move towards MSY. Quite why MSY is of such importance is difficult to fathom. It seems to be based on a misunderstanding of what constitutes waste in a society. If the fish stock is exploited below the MSY level, fish are somehow wasted because they are left in the sea. Figure 2 TC2 MSY Y2 TR SY, Revenue, Cost fMSY f2 D-60 Fishing Effort
  • 62. In most fisheries, over time the gap between fishing revenues and costs has tended to increase, for instance due to rising real demand for fish and improved fishing technology. As a result, many fisheries are described by Figure 2, with TC line TC2. In this case, free and open access leads to overexploitation on both economic and biological definitions. From a management point of view, if the objective were to achieve MSY, the goal would be to reduce fishing effort from f2 to fMSY. If the goal were to achieve the economic optimum, an even greater effort reduction would be sought to fMEY (not shown on the diagram but equal to half of f2). It will be noted that in severely overexploited fisheries, the level of resource rent at MSY and MEY is not very different so that aiming at MSY may not do much economic damage. Nonetheless, in this model MEY will always be a more conservative target than MSY (and in practice also, although in theory MEY could exceed MSY in a dynamic version of the fisheries model if social discount rates were high enough). In both Figures 1 and 2, it is clear that if fishing effort is reduced below the open access level, resource rents, which in Figure 2 are very substantial relative to fishing costs, will be generated. Successful fisheries management will depend on what happens to the resource rents. If they continue to be perceived as excess profits, then fishing effort will inexorably drift back (or more likely rush back) towards the free and open access level and the sacrifices which have been made in the name of fisheries management will be lost (for instance, the often substantial financial resources devoted to capacity reduction programmes where the impact on resource rents is not taken into consideration). The principal conclusions are therefore that: • resource rents are at the heart of the overexploitation problem in unmanaged (and also in poorly managed) fisheries • unmanaged fisheries will always be overexploited in an economic sense, i.e. they will always have overcapacity • unmanaged fisheries may also be overexploited in a biological sense, i.e. they may exhibit overfishing but this will depend on the economic characteristics of the fishery • both overcapacity and overfishing are symptoms of the fundamental problem which is resource rent dissipation. Attempting therefore to resolve either overcapacity or overfishing problems without addressing the resource rent issue is doomed to failure in the long run. A3.3. OPTIONS AVAILABLE FOR FISHERIES MANAGEMENT Fishery management measures may be introduced for a host of reasons. The most common objective is to ensure fish stock conservation, but since overfishing is a consequence of the fundamental resource rent dissipation problem, it is not surprising that measures aiming only at conservation have had very limited success. This section looks at fishery management measures that deal with the source of the problem rather than its symptoms. D-61
  • 63. Before doing so, two important points might be noted. First, the simplest and cheapest way of dealing with overexploitation is to prevent it from occurring in the first place. Given that the economic dimension of overexploitation occurs from the very beginning of a fishery, a fishery management and development plan should be implemented as soon as possible with an explicit aims of preventing unnecessary capacity development and preventing overfishing. As overexploitation arises from resource rent dissipation due to free and open access conditions, the development of a policy framework for fishery management requires that fisheries authorities simultaneously develop policies to limit and/or price access. Second, before developing a policy to deal with overexploitation, an important step is to ensure policy coherence by evaluating the impact of current policies, which may be worsening the overexploitation problem in a number of ways. It must be stressed that overexploitation arises at the aggregate (fishery) level as a result of perverse economic incentives perceived by fishers operating in the fishery. A well-known source of perverse incentives is subsidies and other government financial transfers. Such financial support to the fishing industry generally, although not always, results in increased fishing capacity, worsening the overexploitation problem, other things being equal. Moreover, such support is almost always targeted at fishing capital, putting small scale fishers who depend more on labour at a disadvantage. From the perspectives of both overexploitation and poverty, reducing subsidies in general to fishing is likely to have a positive effect. Once policies designed to make the problems worse have been corrected, there are a number of options available to fishery managers. Catch-based use rights: individual transferable quotas Individual quotas (IQs) systems have been developed in a number of countries over the last decade. Such systems are in principle very simple, although as always the devil is in the detail. In essence, under an IQ system, the fisheries authorities set a Total Allowable Catch for the season (or other relevant period). This TAC is then divided amongst fishers on the basis of their percentage shares in the fishery. Multiplying the TAC by their percentage shares determines the quantity of fish that each fisher may land (legally) over the period under consideration. Where they can be used, IQs have a number of advantages. The most important is that they enable the resource rent to be capitalised into the price of the right IQ (the exact way in which this happens will depend on the detail of the system – length of rights, transferability restrictions and so on). The resource rent will no longer drive overexploitation of the fishery. And fishers will be given every incentive to avoid overexploitation because it will reduce the value of their fishing rights. D-62
  • 64. IQs will remove the incentive to invest in excess capacity, and will provide an adjustment mechanism for the fishery. Through the transfer of IQs, a country will be able to get the maximum out of its fish resources since the most economically efficient operators can increase their shares by trading, giving the less economically efficient operators a means to leave the fishery. An IQ system can be very flexible. One criticism levelled at IQs is that they enable large-scale operators to corner the market. The evidence on this point is mixed. Sometimes it is the large-scale operators who have the advantage, sometimes it is small-scale fishers. In any event, if policy-makers which to protect poorer fishers, it is a simple matter within an IQ system to create classes of IQs. Holders of small- scale rights could for example only be permitted to trade with other small scale fishers or not at all. Careful consideration must be given however to the protection that such transfer restrictions really offer. The use of IQs requires careful consideration of the characteristics of the fishery to be managed. Clearly, a key consideration is whether fishers will comply, or can be made to comply at reasonable cost, with the restrictions imposed by their catch rights. Even if they do comply, consideration must be given as to how they do so. For instance, if fishers meet their quotas by discarding large quantities of otherwise marketable fish, then the system would appear to have a problem. Where they can be used successfully, IQs give rise to very strong wealth effects. The amounts involved often come as a surprise. For instance, it has been estimated that potential resource rents in the Moroccan octopus fishery are in excess of 200 million US dollars per annum. Estimating IQ prices is a tricky exercise but on the assumption of a discount rate of 10% and the expectation that the rents will continue ad infinitum on a stable basis, the total capitalised value of IQs in this one small, although very valuable, fishery might be in the order of 2 billion US dollars. Given the amounts involved, great care has to be taken in the design of the IQ systems. Many developed countries have chosen to give the wealth to fishers, but for developing countries it seems important to consider explicitly the link between IQs and resource rental charges. Input-based use rights: licences and limited entry Licensing fishing vessels and restricting their number is a common management tool that remains the main alternative to IQ systems. Licensing systems are relatively simple to operate and there is some evidence, particularly in the form of high prices paid for licences, that they can generate resource rents. The big challenge with licensing systems is whether they can avoid rent-seeking behaviour in the form of input substitution (colloquially known as "capital stuffing"). In essence, the problem is that whatever is licensed (vessel, gear, horsepower etc) is being used as a proxy for fishing effort. Fishers will therefore seek to produce more fishing effort by substituting uncontrolled inputs for controlled ones. The extent to which this is possible will depend on the nature of the fishing effort production D-63
  • 65. function. If the degree of flexibility is low, then the management problem is greatly simplified since controlling one input will effectively control all others. On the other hand, if flexibility is substantial then it may be impossible to use input-based management measures because as soon as one input is controlled it is replaced by more of an uncontrolled one. There is a need, therefore, for technical work in support of licensing to investigate the extent to which inputs may be substituted one for the other in the production function. But even in the case where technology is very inflexible so that input proportions are difficult to vary, it is important to recognise that this gives only a short respite to the fishery manager. Incentives will be established in both the fishery sector and the sectors servicing it to innovate so as to increase the flexibility of the production technology. Input regulation in the inflexible technology case is likely to create distortions outside of the fishery sector in terms of excessive inventive and innovative behaviour. Even apparently simple management measures will be subject to input substitution. For instance, restrictions on fishing time in the form of closed seasons or days at sea restrictions will quickly lead fishers to utilise the fact that there are different kinds of time. They are likely to attempt to reduce travel time (faster vessels, re-designed propellers etc.) and gear manipulation time (mechanised gear handling etc) so as to be able to increase fishing time within the constraint imposed by the closed season. Co-management and community-based management “Co-management” covers a wide range of possible systems involving the sharing of management responsibilities between the State and communities or more conventional fisher organisations. If a co-management approach is to be implemented, both research and extension work are likely to be required: the former to consider how to create such groups, the latter to undertake training as to how they should operate. There will also be a need for a mechanism (such as an overall co- ordinating body) to deal with disputes between and within groups. Where there are overlapping groups and/or stocks, a key issue will be how to change the allocation of rights over time as relative efficiencies change. Also, consideration might have to be given to the issue of what to do if the group no longer represents the best management alternative. How are rights to be transferred away from the group? Where a co-management approach is to be used, the main issue will be to decide precisely what rights and responsibilities are being transferred to each group. A key question will be whether the group has property or use rights. The group is likely to be interested in managing fishing capacity to ensure sustained benefits to all members. Its ability to do so will depend on a number of factors: • Level of co-operation within the group. Note that this is required on a sustainable basis – the State will have to monitor different groups to ensure that they do not break down over time, particularly because this has tended to be the fate of many traditional management systems. D-64
  • 66. • Exclusivity of access: a co-management system without exclusive access will be as vulnerable to increases in capacity from uncontrolled elements as are systems such as ITQs or exclusive zone • Security of rights: the group will not attempt to control fishing capacity if it cannot be sure that it will be able to reap the benefits. • Objectives of the group: although controlling capacity will increase the profitability of fishing, the group may have other goals which need to be recognized (e.g. employment) even if they prevent effective control and avoidance of excess capacity. • The incentives at the individual level within the group may not be all that different to those existing under State management systems. In particular the group may find that input substitution undermines its capacity management efforts. As is the case with the State, results will depend on management methods used by the group. • Respect for the group' leadership by all members. s Community-based systems are compatible with a range of different instruments. In small-scale fisheries, it is common to allocate rights in terms of space. Such systems do work well in policing fishing practices and may be upgraded by the community to regulate capacity. With higher exploitation rates, however, they are vulnerable to the fact that the space may cover a fraction of the stocks and therefore adjacent communities will need to collaborate effectively. Otherwise, it may be preferable to allocate catch rights instead of or, at least, in addition to spatial rights. Provided that the community can be relied upon to ensure that in the aggregate its members do not exceed their catch allocation, such systems can be very effective. Taxes and resource rental charges Taxes may be used both to correct the fisheries exploitation problem and to ensure an appropriate sharing of wealth between stakeholders. In the first case, taxation can be used to force fishers to take account of the value of the valuable fish stock that they are using in order to produce fish output, in the same way that they are forced to take account of the cost of other inputs, such as oil, gear, labour and so on. In the second case, taxes can be used to extract a return from the fish resource for the nation. In this view, the State plays the role of steward of the resource on behalf of the owner - i.e. all citizens of the country. The State therefore collects resource rents which it then uses for the benefit of all citizens. In this way everyone can derive some benefit from the nation' fish resources, without necessarily having to become a s fisher. Many extractive industries are managed on this basis, through the payment of royalties for example. If taxation is to be used, States will have to consider a number of issues: • What to tax? The choice is generally between catch and effort. In theory the two are equivalent but in practice it is almost always easier to tax the catch. A number of options exist for taxing catch: at the point of landing, at some point D-65
  • 67. in the processing chain or, in some cases, at the point of export. There is often a presumption against export taxes but it needs to be made clear that the fisheries case is special in that such taxes are being used as a way of enhancing conservation and economically rational exploitation of the resource. • What institutional arrangements are required? The system will only work if there is compliance with it. As with all costs, there will be an incentive for enterprises to reduce their tax burden so far as possible. An appropriate institutional structure will have to be established to ensure compliance at reasonable cost. One of the key issues regarding the use of a taxation system is whether it can be made to work without all, or most, of the benefits of reduced exploitation being used up as extra costs required to enforce the system. • How to avoid rent-seeking behaviour within the tax system? Given the value of fisheries resources, a taxation system can be expected to generate significant amounts of revenue. Depending on the precise institutional arrangements that are established, such revenue might encourage rent-seeking behaviour of various kinds, going from the exploitation of regulatory loopholes to illegal practices. An appropriate system of checks and balances will be required to ensure that rent-seeking behaviour does not use up a substantial portion of the benefits of the system. A common practical objection to taxation is its political acceptability. Some find it difficult to see how taxation can be introduced in overexploited fisheries when fishing enterprises are often in poor economic shape. However, this simply means that first, taxation must be introduced gradually on an opportunistic basis, taking advantage of the variability of key economic parameters, such as fish prices, and second, that taxation is best used as part of a set of management measures. Because of its importance in extracting wealth to fund Government policy, it is perhaps worth spending a little time considering how taxation (or resource rental charges) might be introduced, and analysing the impact. In order to do this, it is useful to transform the basic fisheries model into a supply and demand model. Relating fishing costs and revenues directly to sustainable yield achieves this, and results in a backward-bending supply curve (because supply declines as the fishery expands beyond MSY). This supply curve can be associated with standard demand curves (either horizontal, implying that fish price is independent of quantity, or downward sloping, implying that fish price must fall if more is to be sold). This supply and demand model allows a range of cases to be considered. Here, because of its widespread relevance, we will consider the case of a fishery that is overexploited both economically and biologically (i.e. beyond MSY). Figure 3 considers the case where the demand curve is horizontal and Figure 4 the case where it is downward sloping. One criticism of taxation is the difficulty to introduce it. Here, we take a simple example. Looking first at the case shown by Figure 3, suppose that, for some reason, demand in the fishery rises substantially so that the demand curve shifts from D1 to D2. Suppose also that the Government sets the simple objective of neutralising the D-66
  • 68. demand increase so as to maintain the fishery in the condition it was in previously. What happens? Figure 3 S Price D2 A p2 B D1 p1 Y2 Output (SY) Y1 With the original demand curve D1 the fishery is in equilibrium producing an output of Y1 at a price of P1. If the demand curve increases (shifts upwards) to D2 then, if the fishery is unmanaged, the ultimate result is to reduce output to Y2 whilst increasing price to p2. If the Government now introduces a resource rental equal to the difference between the two demand curves (i.e. t = p2 - p1), then the fishery will continue to produce Y1. Table 1 below summarises the impact on consumers (C), producers (P) and Government (G). D-67
  • 69. Table 1 BEFORE AFTER EVALUATION With resource With resource Unmanaged Unmanaged rentals rentals C Y1 @ p1 Y2 @ p2 Y1 @ p2 -££ ↓Y and ↑p -£ ↔Y and ↑p ? ∆TR small, Total Revenue = P p2*Y2 p1*Y1 could be +ve or 0 p1*Y1 -ve G T=0 T=0 T = (p2-p1)*Y1 0 +££ ↑ T Extraction of T Increase in through demand leads to availability of a large loss for rents and some consumers and transfer from C Net little change to G. C better (possibly a off than with no decrease) for management, P producers no worse off than before ↑D. Table 1 shows that the main impact of taxation is on consumers and the Government. At least in the case shown, producers are left no worse off than they were previously. Consumers gain under taxation, compared to no management, because they can have the same quantity of fish as previously, at the new higher price. Government clearly gains by the amount of taxation T. Figure 4 presents the same analysis in the case of a fishery facing a downward sloping demand curve. It is assumed that the Government objective remains the same, to hold output at Y1. Figure 4 S p2 Price A p3 D2 B p1 D1 Y2 Y1 Output (SY) D-68
  • 70. Table 2 BEFORE AFTER EVALUATION With resource With resource Unmanaged Unmanaged rentals rentals -£££ -£ C Y1 @ p1 Y2 @ p2 Y1 @ p3 ↓Y and ↑↑p ↔Y and ↑p ? ∆TR small, Total Revenue = P p2*Y2 p1*Y1 could be +ve or 0 p1*Y1 -ve G T=0 T=0 T = (p3-p1)*Y1 0 +££ ↑ T Extraction of T Increase in through demand leads to availability of a large loss for rents and some consumers and transfer from C Net little change to G. C better (possibly a off than with no decrease) for management, P producers no worse off than before ↑D. In this case, in the absence of management, the existence of the downward sloping demand curve will result in a sharper increase in price. Consumers will lose because they have less fish available at substantially higher prices. Once again producers will find themselves more or less in the same position because their total revenue will hardly change (p1*Y1 being more or less equal to p2*Y2). The tax per unit will not be equal to (p2-p1) in this case. It can be seen from Figure 4 that in order to hold production at Y1, the per unit tax will have to be (p3-p1). So with a downward- sloping demand curve, taxation actually results in lower prices than would be the case in an unmanaged fishery. As summarised in table 2, the result is that both consumers and the Government are better off under taxation than where the fishery is left unmanaged, and producers are no worse off. These results demonstrate first that taxation is worthy of far more consideration in fisheries management than it has received to date, and second that, as emphasised throughout this report, management is fundamentally about the wealth that fish resources can generate. A3.4. BENEFITS TO THE POOR OF FISH RESOURCES The basic fisheries model highlights the importance of the inherent wealth of fish resources, in the form of resource rent, in driving exploitation patterns. This same wealth indicates the potential benefits that can be derived from such resources. This section considers how the poor in particular can benefit from fish resources. D-69
  • 71. Rather than considering wealth, fisheries policy around the world has often focused on fish production. For many fishery ministries, the key indicator of policy success is the physical amount of fish produced each year. Such an indicator is problematic when dealing with a renewable natural resource with a finite supply. To begin with, since there is clearly a limit to sustainable physical production, using physical production as an indicator places an apparent, although artificial, upper bound on policy success. And having a physical production target adds to the overexploitation pressure which already exists in abundance in the fishery. Such problems might appear self-evident but numerous countries continue to use a physical production success indicator, as do numerous international treaties, which often set MSY as their goal. As a consequence, it is generally easy to obtain data on the amount of fish produced, somewhat more difficult to obtain data on prices and hence values produced, and usually quite difficult to obtain cost data. The result is that few countries have much idea of the resource rents foregone in their current fisheries exploitation systems. The focus on production also tends to colour the way in which benefits from the fishing activity are perceived. Many of the benefits relate to the activity itself and result from being a fisher, or being related directly to the fishing activity in some way. The most obvious kind of benefit is where the fishery is used to provide employment or livelihoods of last resort. Where the poor have no alternative occupation available, they can always go fishing. But this is a very curious employment of last resort. Unless they are doing an activity with no input other than their labour, the poor, like everyone else, are required to pay for their inputs. They do not usually get the boat or the outboard motor or their fuel for free. It is only the fish resource that for some reason is chosen for special treatment. Whilst the provision of employment, and still more livelihoods, of last resort should favour the poor, where the provision relies on fishery management failure, the result is to increase the risks faced by the poor and their vulnerability to external shocks. This problem arises in part because the strategy tends to result in fish resources being exploited beyond their sustainable limits. A major reason for this that in order to benefit from fish resources, the poor have to be involved in the activity (or be economically related to someone who is), putting yet more upward pressure on the fish resource. Another problem is that the "last resort" element is seldom the centrepiece of fishery development and management strategy. Many developing country governments recognise only too well the wealth potential of their fish resources, but they do not know how (or are politically unable) to extract this potential through domestic fishers, especially where these are considered to be poor. As a result, many such governments have come to depend on selling fishing rights to technologically-superior (and often subsidised) foreign fishers, as a way of generating some of the wealth potential of their fish resources. D-70
  • 72. These fishing access agreements have come in for much criticism. One advantage that they may have is that they generate wealth that in principle may be used to benefit the country as a whole, or the poor in general. This contrasts with the last resort strategy which favours only those poor who are involved in the fishing activity (or very closely associated with it in some way). The combination of a policy of last resort for poor domestic fishers coupled with access agreements with foreign fishers may represent a way of "muddling through" in the sense that the poor receive benefits in two possible ways: either through the activity (employment, income, food) or through the revenues generated by the access agreement (depending of course on how these are spent). The difficulty is that this approach appears to be unsustainable. As a result, there is now intense pressure to improve fishery management systems world wide. The problem is that such improvements pose a significant threat to the poor because their livelihoods depend on the fishing activity itself, rather than on the wealth inherent in the resource. Although policies to use fish resources as an employer of last resort may be demonstrated to be economically sub-optimal, they may be socially and politically preferred if there are problems with dealing with income and wealth distribution. If a well-managed fishery produces more wealth but this wealth is concentrated in the hands of an elite and wealthy group, then social welfare may be enhanced by choosing an economic sub-optimum. The best solution to this problem resides clearly in resolving distributional issues, but this may be easier said than done. The economic and biological overexploitation of some fish resources may be the price that has to be paid for social justice. Nonetheless, it is important to analyse why the fisheries sector is being asked to play the last resort role. There is often an assumption that small scale fishers are economically inefficient and must therefore be protected in some way. For instance, DfID (2004, p.1) argues that among the ways in which natural resources can contribute to support growth in developing countries is through the provision of a safety net, "helping the livelihoods of those who cannot play a central role in growth processes, e.g. artisanal fishing". This implicit assumption that artisanal fishing is somehow outside the main economy is widespread. Although in some cases it may doubtless be representative, often the problem seems to arise from the way in which fisheries are managed rather than any inherent characteristic associated with small- scale fishers. In particular, the general absence of adequate use right systems means first that small-scale fishers have no way to protect their livelihoods against encroachment from other users of the same resource, and second that there is no mechanism to facilitate adjustment in fish resource exploitation patterns when this is required. Moreover, the standard approach of attempting to manage the "small-scale fisheries sector" reinforces the bias against small-scale fishers because it tends to exclude them from fisheries-based management plans. D-71
  • 73. Putting into place a use rights system including small-scale fishers would enable the hypothesis that they require protection to be tested empirically. It is likely to turn out that in some cases their technology is the most appropriate and in other cases it is not. If the view is taken that such fisheries still require protection, use rights provide a framework within which this may be implemented, for instance some use rights may be designated as small-scale and their transfer to other users may be banned. A.3.5. THE CRUCIAL IMPORTANCE OF DISTINGUISHING BETWEEN WEALTH AND INCOME A key issue when attempting to use one sector of the economy, such as the fishing sector, to alleviate poverty is to clarify exactly what is feasible. It is common to find the improvement of fishermen' incomes as an objective of s fisheries management systems, especially in the case of developing countries (e.g. Lawson, 1984), and this might seem a reasonable goal in a poverty reduction programme. The difficulty is to analyse how such a goal might be achieved. There has long been evidence that fishing incomes may be low in both developed (eg MacKenzie, 1979) and developing countries (eg Panayotou, 1982). The key question is "why?" or put differently "what determines fishers'incomes?". One argument might be that incomes are low because fisheries are not managed, or not managed well. As has been argued above, free and open access fisheries will be exploited in such a way that all resource rent is dissipated, but does this necessarily imply low fishing incomes? The answer seems to be no. The fundamental reasoning was well explained by MacKenzie (1979, p816, footnote 5) who argued that "the received image of the poor fisherman is to be stood on its head - he is a fisherman because he is poor, not the other way around". In other words, fishing incomes depend on opportunity incomes (that is to say, the amount fishers could earn in their next best alternative occupation). Copes (1988) suggests six reasons why opportunity incomes may be low in small- scale fisheries. These are: (i) the isolation of many fishing communities resulting in poor educational facilities and infrastructure links as well as few alternative employment opportunities, (ii) the existence of surplus labour due to productivity gains, (iii) capital asset fixity, (iv) lifestyle preferences, (v) highliner illusion and (vi) perverse assistance (i.e. welfare state measures designed to provide an income safety net). Similar factors are advanced by Panayotou (1982) to explain labour immobility although he adds caste restrictions, cultural factors and simple lack of knowledge of alternative occupations. The proposition that fishermen' incomes depend on opportunity incomes is s reinforced by evidence presented by Panayotou (1982, p.30) who notes that some Red Sea and East African countries found it difficult to continue fisheries D-72
  • 74. exploitation in the face of more remunerative employment opportunities associated with the oil industry. A similar situation exists in the case of the Pacific island of Nauru where, in the past, the guano industry provided employment and wealth for the island' population and attempts to develop fishing were unsuccessful. s Both standard economic theory and empirical evidence suggest therefore that fishermen' incomes are determined by opportunity incomes rather than by anything s that happens within the fishery itself, except perhaps in the short run. This view has major policy implications for the way in which the goal of improved fishing incomes can be achieved. Rational fisheries management is therefore (or at least should be) about wealth generation if the objective is to improve incomes. This wealth must then be invested in such a way as to benefit the poor so as to increase the opportunity cost of labour. An obvious possibility would be to use the fisheries wealth to educate fishers, thereby increasing their options in the labour market. The fact that management is about wealth raises questions as to how to implement fishery management measures, particularly those of an economic nature. Consider for instance ITQs. It is fairly easy to demonstrate that ITQs will lead to economically efficient fisheries. But the consequences of this for poverty (and for many other things) depends on how the ITQ rights are allocated, and the way in which they are supported by other management measures. If, as is often the case, they are given free of charge to fishers on the basis of their historical fishing performance, then these fishers can be expected to become wealthy as the value of their ITQs increases. But such an approach raises at least two difficulties. First, it is likely to be perceived as unfair (e.g. by future fishermen, particularly those who would have fished in the very near future, or by non-fishers, especially those living in the same locality or community as the fishers, or even by society in general if the view is taken that the government is custodian of natural resources on behalf of society) and equity issues may undermine the management scheme over time. Second, the approach may have serious economic consequences since the investment decisions that follow the private accumulation of wealth are likely to be different to those if public accumulation is involved. The major risk associated with operating via the private sector is that the investments made may not improve the situation in the relevantly-defined economy at all. For instance, recipients of fish resource rents in a developing country might decide that their best private option would be to invest them in a Swiss bank account. One alternative would be to link ITQs to a system to extract resource rentals. Where taxes have been considered by economists for use in fisheries they have often been rejected on grounds of impracticability. Sometimes taxation is simply considered to be politically unacceptable. Sometimes the rejection seems to lie in a failure to consider the necessary institutions. Perhaps most frequently however it results from the approach of fisheries economics which is almost exclusively to consider optimal solutions. For instance, Arnasson (1991, p.410) argues that "... to calculate the D-73
  • 75. correct Pigovian tax, it is necessary to know practically everything about the fishery. ... Clearly these requirements exceed the capabilities of any fisheries manager". But this statement confuses the desired result with the way to achieve it. A satisficing approach to rent extraction could yield substantial amounts of rent to a government and, on a trial and error basis, could be expected to approach the maximum. The main difficulty is to think of imaginative institutional arrangements that will allow the desired results to be achieved. One question which comes to mind is: if the State is considered the resource owner, should the State not try to recover all resource rents? There may be something in this point of view. However, a mixed strategy of rights coupled with taxes appears likely to give the best results. It will be difficult in practice to extract all rents (because of the variability associated with key parameters such as fish prices and input costs) but even if it were possible it appears undesirable. The main problem is that it would remove the incentive for fishers to try to improve their fishing operations. Leaving them with a share of the resource rents would, on the other hand, give them an incentive to try to increase prices and/or reduce costs because this will increase the price of their fishing rights (whilst also increasing the return to the Exchequer). In summary then the policy issues are: • to recognise that management cannot increase fishermen' incomes s directly. Incomes depend on alternative employment opportunities and therefore specific policy measures to increase opportunity incomes will be required. • if opportunity incomes do increase in depressed coastal areas, why will they not be eroded by movements of labour from elsewhere in the economy? Of course, there is no guarantee that they will not be. If labour is mobile then the policy debate is somewhat different. Essentially the debate is about the relative position of fishers, in which case it will be necessary to adopt specific supply-side measures such as training to ensure that the value of fishermen in the labour market is raised. However, the policy debate, in many cases, is more than this. It is a debate about the absolute condition of fishermen and fishing communities. These communities are poor because there is a lack of investment providing alternative employment opportunities. The advantage that the fishery offers is a perennial source of funding based on regional wealth. • in developing countries, there is a need to move beyond the idea of fisheries development to a consideration of the role of fisheries within the development process of the economy as a whole. There is a need for work on institutions and methods of management, and particularly for an analysis of alternatives and/or supplements to fishing rights such as ITQs. • there is a need to clarify the role of the State in fisheries management and in resource wealth appropriation. Although State performance world-wide may not give grounds for unbridled optimism, the problem for developing countries is that economically-efficient management methods that allow resource rents to be capitalised may simply result in their transfer out of D-74
  • 76. the country. In such cases the country may find itself facing some strange capital flows where wealth generated by its fish resources is placed with banks in the developed world from which it re-appears as loans or aid. It seems a somewhat more sensible policy that the developing country should ensure that its resource wealth is used to develop its own economy. • it is important that expectations of what economic management of fisheries can achieve are realistic. Economic management will not suddenly make everyone associated with the fishery much better off. Rather, the fishery can be a very important renewable source of capital that enables investments to occur (in productive activities, in infrastructure, in health, in education ...) that gradually enable sustainable living standards to improve. REFERENCES AND FURTHER READING Bailey, C. and Jentoft, S. (1990) Hard Choices in Fisheries Development. Marine Policy, July, 333-344. Bostock, T., Manning, P., Cunningham, S. Neiland, A.E. and Bennett, E. (2004) Good Management Practice in Sustainable Fisheries: Policy Briefs. (http://www.sifar.org/DFID_Keysheets/wb_index.htm) Catanzano, J. and Mesnil, B. (1995) Economics and Biology Used in Fisheries Research or When Social and Natural Sciences Try to Depict Together the Object of their Research. Aquatic Living Resources 8: 223-232. Cunningham, S., Dunn, M.R. and Whitmarsh, D.J. (1985) Fisheries Economics: An Introduction. London and New York: Mansell. DfID (2004) "Pro-poor growth: a guidance note to assess the contribution of natural resources and the environment" Mimeo, 18p FAO(2002) The State of the World Fisheries and Aquaculture. Rome: FAO. Lawason, R. (1984) Economics of fisheries development (London, Frances Pinter) 283p Panayotou, T. (1982) Management Concepts for Small-Scale Fisheries: Economic and Social Aspects. FAO Fish Tech Pap. 228. Rome: FAO. Platteau, J.P. (1989) The Dynamics of Fisheries Development in Developing Countries: A General Overview. Development and Change 20: 621-651. D-75
  • 77. A4. POLICY AND GOVERNANCE FOR DEVELOPMENT A4.1. INTRODUCTION AND OBJECTIVES In 1992, two decades after Robert MacNamara’s charge to the World Bank to attempt to reduce poverty, the incumbent president, Lewis Preston, still had to proclaim that “no task should command higher priority for the world’s policy makers than that of reducing global poverty”. In many countries, the gains from growth have not been reaching the poor, and the simple question is therefore ‘why not?’. The answers relate in part to three key dimensions: - the rate of growth - the pattern of growth - the failure of government policies It can be shown that given a particular economic structure and policy environment, rapid economic growth is better than slow growth in eradicating poverty. However, the pattern of growth also matters in determining who are the beneficiaries of growth. The incidence of poverty can increase if the pattern of growth is urban biased, displaces unskilled labour, alters relative prices to the disadvantage of the poor, creates a gender gap, deteriorates child welfare, and erodes traditional entitlements that have served as safety nets (Lipton, 1976; Williamson, 1991). In most countries, economic structure and the policy environment do not remain constant. Even with respectable rates of growth, the total number in poverty can increase. And it has done so in many countries because of the adverse changes in economic structure and the absence of appropriate policies by government. In simple terms, according to Meier (1995) “Growth does not help the poor unless it reaches the poor. Nor does government help unless the poor are the beneficiaries of public policies” (p.30) In the following brief account, the nature and role of government policy-making and policies will be explored, with particular reference to poverty alleviation and economic growth. Particular emphasis will also be given to the relationship between policies for the management of natural resources and poverty alleviation. In effect, the primary objective is to provide a range of perspectives on the nature of the policy process in these important domains and which can help in our analysis of policy performance. There are four sections to follow. The first section presents a set of key definitions and important concepts in three areas – policy, the policy process and governance – which are central to the analysis and discussion of natural resource management and poverty alleviation strategies pursued by government. The second section presents and highlights a range of key issues which have emerged recently as a result of on- going research in the field of natural resource management policy (NRM), with specific examples from fisheries. A third section, identifies and discusses how these latest research findings are helping to guide new strategies for policy development D-76
  • 78. relating to NRM and poverty alleviation, with particular reference to pro-poor growth. A4.2. KEY DEFINITIONS AND CONCEPTS From the outset, it is important to consider the definitions and concepts which underpin the analysis of the relationship between NRM and poverty alleviation in three areas – policy, the policy process and governance. First, policy can be defined as ‘a course of action proposed or adopted by those with responsibility for a given area and expressed as formal statements or positions’. In most countries, the policy process, as undertaken by government, involves both the development and design of policy and its subsequent implementation across the full range of national sectors (e.g. industry, transport, health, agriculture, fisheries etc). Policy analysis attempts to provide a better understanding of the policy process. For example, by identifying the factors which have affected policy performance in the past, it may be possible to improve policy performance in the future by addressing these factors. Fig. 1. The policy process: linear model AGENDA PHASE DECISION PHASE IMPLEMENTATION PHASE Successfully implemented Decision for On agenda reform Strengthen Reform Issue Unsuccessful institutions Not on Decision against Fortify political will Time The linear (or rational) model is the most widely held view of the way The linear (or rational) model is the most widely held view of the way in which policy is made (Fig. 1). Policy-making is seen as a problem-solving process which is rational, balanced, objective and analytical. Decisions are made in a series of sequential phases as follows: • Recognising and defining the nature of the issue to be dealt with; • Identifying the possible courses of action to deal with the issue; • Weighing up the advantages and disadvantages of each of these alternatives; • Choosing the option which offers the best solution; • Implementing the policy; • Possibly evaluating the outcome; D-77
  • 79. Fig. 2: Policy process – non-linear Fig. 2. The policy process: a new look at the linear model VALUES / FACTS / DECISIONS KNOWLEDGE OPERATIONALISING Sutton (1999) states that this model assumes that policy makers approach the issues rationally, going through each logical stage of the process, and carefully considering all the relevant information. If policies do not achieve what they are intended to achieve, blame is often not laid on the policy itself, but rather on political or managerial failure in implementing it. Failure can be blamed on a lack of political will, poor management or shortage of resources, for example. Second, policy-making can also be viewed as a process, in other words, the ‘policy process’. For a start, there is much evidence that this linear model of policy-making is far from reality, and that in fact, a more appropriate conceptualisation would need to incorporate a certain fluidity between decision-making, knowledge and the operationalisation of policy (Fig. 2). According to Sutton (1999), who has produced a review of how policy-making is considered by different disciplines (political science, sociology, anthropology, international relations and business management) in an attempt to build a broader picture of the process, there are six cross-cutting themes which emerge from this analysis, which need to be considered carefully: • There is a dichotomy between policy-making and implementation; implementers are crucial actors whose actions determine the success or failure of policy initiatives. • Policy implementation needs to be carefully managed; it brings about change in the relationships between the actors in a system, and this change needs to be managed (requiring consensus-building, participation of stakeholders, conflict resolution, contingency planning, compromise, resource mobilisation and adaptation). • The policy process is influenced by a range of interest groups that exert power and authority over policy-making; this must be recognised and managed through the development of epistemic communities or discourse coalitions (or ‘think- tanks’). • Ownership of the policy process tends to be drawn away from local and indigenous groups to policy experts or outsiders, often through the use of particular development narratives or discourses (e.g. labelling of the poor, landless, women etc.). D-78
  • 80. • The simplification of issues (in order to promote understanding) can go too far; the drawback is that it can lead to a misrepresentation of the situation and false information upon which to make decisions. • Narrowing down of policy options (to allow choice of alternatives) can be counterproductive; it may restrict seeking out the best possible policy options. Keeley and Scoones (1999) also highlight that policy is very difficult to define in a simple linear manner. In reality, the broad policy process tends to be non-linear, and policies generally consist of a broad course of action (or inaction, for that matter). These can also be conceptualised as a web of interrelated decisions which evolve over time during implementation. Policy also needs to be seen as an inherently political process, rather than simply the instrumental execution of rational decisions. While the complex and often poorly understood nature of the policy process presents a major challenge for policy analysis, one of the first ways of getting started is to examine the performance of the current policy framework in a sector such as fisheries (assuming appropriate information exists). A simple 4-step approach to policy analysis (ex-post) is shown in Box 1 below. Clearly, this simple 4-step policy analysis procedure can provide a starting point for the identification of future policy development opportunities. However, it should also be noted that the analysis often becomes progressively more complicated and difficult from Step 1 to Step 4, and each situation needs to be considered on a case- by-case basis in the first instance. Box 1: Policy analysis: 4 steps Step 1: Identify policy profile What are the objectives of policy? What are the mandates related to and derived from this policy? Which organisations or institutions are responsible for policy design & implementation? What is the policy context? Step 2: Assessment of policy performance Have the stated objectives of policy been achieved? To what extent have they been achieved? What sources of information underpin the assessment? Step 3: Evaluate policy performance How can the level of performance be explained? What influence have political interests had on performance? How has policy been influenced by actor-networks? How have policy approaches been shaped by particular development narratives? Step 4: Identify options for policy change (new policy spaces) What opportunities currently exist for policy change? What opportunities might be anticipated in the future? What constraints does policy change face in general? How can these constraints be overcome? D-79
  • 81. The third concept is governance. It is also appropriate to consider how governance and the policy context are inter-related, and this will be examined below. Governance is a widely-used term, but in common with others (for example, ‘sustainable development’ and ‘bio-diversity’), it is not often properly defined and is not easy to quantify. There are a number of useful and accessible definitions which can be used as a starting point, as shown in Box 2 below: The first definition from the World Bank is made with reference to the role of government, and in fact, for most people, “governance” is what governments do. However, the second definition from Kooiman (2001) reveals that the concept of Box 2: Governance – 4 definitions (1) ‘Governance is the manner in which power is exercised in the management of a country’s economic and social resources’ (World Bank, 1997, p.7). (2) ‘Governance is the totality of interactive activities and institutional arrangements, in which public as well as private actors participate, which are aimed at solving societal problems, creating societal opportunities, attending to the institutions within which these governing activities take place, and establishing a normative foundation for all those activities’. (Kooiman, 2001, p.3). (3) ‘Governance may be defined as the capacity to get things done without necessarily having the legal competence to command that they be done’. (modified from Czempiel, 1992). (4) ‘Governance refers to the whole array of processes whereby elements in society (government and non-government) wield power and authority, and influence and enact policies and decisions concerning public life, and economic and social development’. (Governance Working Group of the International Institute of Administrative Sciences, 1996) governance can be viewed in a much broader sense, and that all elements of society (for example, the state, market and civil society) have a joint and interactive responsibility for problem-solving and opportunity creation (Fig. 3). Kooiman also identifies that the governance literature emphasises the need for all societal institutions to be involved in these activities, and for all relevant societal and institutional levels and inter-relations between them to be taken into account. This approach assumes that problems and opportunities are embedded in broader societal and political contexts, and cannot be properly understood in isolation. The third and fourth definitions (Box 2) give emphasis to the role of power and authority, and to the fact that these may be spread across different elements in society (both government and non-government). The close association between ‘governance’ and ‘government’, in most people’s minds, is also an important entry-point for considering the role of government, the nature of the state and the impact of these two important elements on different countries throughout the world. It also focuses attention on the terms ‘good governance’ and ‘strong and weak states’. D-80
  • 82. But why are these terms and the ideas behind them important? In simple terms, we have to acknowledge that some countries can be classified as ‘Developed Countries’ and some as ‘Developing Countries’. Reynolds (cited in Dethier 1999), after surveying more than a century of comparative development experience in 40 developing countries proposed an explanation as shown in Box 3. Box 3: Explaining development outcomes ‘the single most important explanatory variable [of development] is political organisation and the administrative competence of government.’ (Reynolds, 1999, p.3) According to Dethier (1999) a proper use of public resources and donor transfers to governments of developing and transition countries appears to be indicative of good governance. Evidence links dismal growth and poverty to corruption, waste and authoritarian practices in government. However, a government’s impact on development is not simply a function of fiscal resources, but also a more intangible thing which one can call the ‘quality of government’. The reason why a government is good or bad, is not always apparent. It is also important to recognise the distinction between the terms ‘government’ and ‘state’. As pointed out by Dreze and Sen (1995) ‘the state is in many ways a broader concept which includes the government but also the legislature that votes on public rules, the political system that regulates elections, the role that is given to opposition parties, and the basic rights that are upheld by the judiciary. A democratic state makes it much harder for the ruling government to be unresponsive to the needs and values of the population at large’. D-81
  • 83. ig. 3. Governance: interactions of state, markets andOF INTERACTIONS TRADITIONAL DIVISION civil society Government Intervention Shifting role Market Civil Society Competition Negotiation Expanding role INCREASING INTERACTION AND OVERLAP Government Intervention Market Civil Society Competition Negotiation Returning once more to Kooiman’s definition and framework for governance, the state (including government) is clearly a crucial element, along with the other two primary elements - markets and civil society. Within ‘strong states’, which are characterised by ‘good governance’, one would expect a responsive and responsible government, well-developed and active markets, and a civil society which is able to benefit from both public (government) and private (market) actions and opportunities. By contrast, in ‘weak states’, with ‘weak governance’, the opposite will almost certainly be the case, with significant evidence of both government and market failure. It is important to consider the challenges which policy-makers and the policy process must face up to in attempting to bring about changes within any sector, whether it is fisheries, agriculture, industry or public services. A good understanding of the policy D-82
  • 84. Fig 4. Policy situations characterised (after Meier, 1995) High understanding of Ordinary policy-making process economic analysis Chosen problems Future research agenda More technical analysis ‘low’ politics-as-usual instrumental rationality society-centred institutions given or ignored Small, incremental Large, innovative Policy changes policy changes Pressing problems Less technical analysis ‘high’ politics constitutive rationality state-centred institutional change Political economy analysis Low understanding of policy- making process situation or context of a country is an important starting point. The policy situation often differs from one country to another, even when considering countries that might otherwise be considered to be close neighbours with similar histories. Meier (1995) provides a useful characterisation of the situations found in Developed Countries (DCs) and Developing Countries (DevCs) using a simple diagram (Fig. 4.). The two major policy situations are defined, firstly, by the extent to which the policy-making process is understood (high to low understanding) shown on the Y- axis, and secondly, by whether policy changes tend to be either incremental or large, innovative ones, shown on the X-axis. In general, in DCs (NW quadrant), there is a high understanding of the policy- making process and the policy space is associated with incremental policy changes involving ‘chosen problems’ (decision-makers choose as priorities). They are subject to technical analysis (e.g. economic analysis) and there is a low degree of politics (i.e. politics-as-usual). In this policy situation, technical policy instruments are the means to achieve policy objectives (i.e. instrumental rationality), and the general perspective is from a society-centred type of policy (with government as the D-83
  • 85. clearing-house or broker amongst interest groups). Institutions are often given or ignored. By contrast, in DevCs (SE Quadrant), at the other end of the policy situation spectrum, there is a low understanding of the policy-making process and the policy space is associated with large innovative policy changes. Here pressing problems predominate. They are forced upon policy-makers through pressure from injured or interested outside parties. Pressing problems are generally those in which a perception of crisis is apparent; the undertaking of policy reform involving large innovative changes tends to be induced by pressing problems. They are also highly politicised and tend not to be amenable to technical analysis. The rationality involved is of a constitutive type i.e. decisions have to be made about how decisions are to be made: a constitution is needed and an institutional context for decision-making has to be established. The policy-making process is more state-centred, and institutional structures need to change. Clearly, the policy situation outlined for DevCs can be characterised by both market and non-market or government failures. It represents the Weak State. For the policy analyst, in attempting to identify and recommend policy reform, there are a number of major challenges including: • Resistance to policy change may be significant (from powerful and elite groups); • Policy analysis needs to consider the winners and losers in policy reform; • Policy reform may require the creation of Win-Win outcomes, or the means to compensate losers; • The creation of political competition and new constituencies may be the key to policy reform in some situations; • New institutional arrangements will also be required to support policy reforms; • Policy-makers will need protection from rent-seekers and interest groups, in order to focus on issues of national priority. In effect, the policy situation of DevCs requires a much broader analysis than the conventional economic and technical analysis usually applied in the policy situation of DCs. Policy analysis and the giving of policy advice in DevCs must have a good knowledge of the underlying political process. It must also be willing to grapple with difficult and sensitive issues such as the power relations within a country, the relationship between state and society, and distribution of economic benefits. However, at the present time, this type of policy analysis is only starting to emerge for many DevC policy situations. At the same time, it is also important to recognise that there exists a broad range of policy situations amongst DevCs – some countries have relatively good policy environments and processes, while at the other end of the spectrum, policy environments and processes are weak. Effective policy analyses and comparisons must be able to deal with these differences. Policy analysis is a difficult task in reality. Using some of the findings of a recent study in Bangladesh (Neiland et al. 2002), it is possible to highlight the challenge which the policy analyst must face (analytic constraints), while at the same time helping to guide the design of a study approach (analytical priorities). The following D-84
  • 86. key features are amongst the most important, with particular reference to the environment, natural resources and fisheries domains: • A large number of policies have been produced over the last 30 years, covering both national and sectoral agenda; there is considerable overlap and lack of coherence between policies; • Policy-making has been predominantly top-down originating from central government; the content of policy has favoured the priorities of powerful, elite groups in Bangladeshi society, often at the expense of rural people; • Policy implementation has been extremely variable, and constrained by a weak and bureaucratic institutional setting; • The assessment of policy performance and policy evaluation has been limited, with minimal feedback into the policy-formation process. The weakness of the institutional setting and lack of fundamental data have been major constraints. In general, policy performance with respect to development outcomes is considered to be weak, with significance poverty and lack of economic development still a major feature of Bangladesh; • Policy changes can and do take place, often under the influence of external pressures, particularly from donor and lending organisations (e.g. WB), and from NGOs operating within the country; Of course, many of these findings can also apply to other DevCs, and while this sort of generalisation is worth keeping in mind, the important fact remains that the improvement of policy performance for Bangladesh will depend on an improved understanding of the specific factors or context which produce these outcomes in- country, and which may of course be different to other DevCs. Barenstein (1994) provides an interesting analysis on the nature of policy and government in Bangladesh (Fig. 5.). In attempting to explain the nature of governance in Bangladesh, he developed a conceptual model that highlights the problems of linkage and feedback between various stages of the policy process. Barenstein believes that the political process in Bangladesh can best be described as one of ‘fuzzy governance’ whereby the usual relations and tensions in the machinery of public policy and management are in such transition that their previous functions change and become extremely hard to predict and understand. Whereas ‘bad governance’ may be set on purpose (dictatorial government, for instance), ‘fuzzy governance’ is the unplanned product of multiple factors in transition. Barenstein demonstrates how ‘fuzzy governance’ affects the policy process by creating policy fractures (Types 1-5) at all stages of the policy process, leading to an overall situation of ‘policy dissonance’, as shown in Fig. 5. D-85
  • 87. Fig. 5. Policy dissonance in Bangladesh (after Barenstein, 1994) 1 5 5 4 2 3 4 5 Policy Declarations the ‘development objectives’ and mandates as stated by government Enacted Policies the passing of laws, approval of budgets, issuance of ordinances etc. Implemented Policies the establishment of suitable structures, staffing etc. Policy Outcomes the impact (if any) of policy Type 1 policy fractures are not enacted due to issues of political culture, lacking accountability or simply ineffective planning. Limitations often associated with new parliamentary democracies. Type 2 policy fractures are not implemented. This link requires the desegregation of policy objectives into distinct programmes and projects so that the possibility of failure is multiplied. It may be related to bureaucratic resistance or managerial incapacity. Type 3 policy fractures result in unexpected outcomes in the short-run or do not lead to sustainability in the long-run resulting from poor policy declarations or implementation. Type 4 fractures occur due to lack of feedback between implementers and policy-makers. Type 5 fractures occur because outcomes (if known) are manipulated or disowned by implementers and policy-makers. D-86
  • 88. A4.3. KEY ISSUES BASED ON THEORETICAL AND EMPIRICAL RESEARCH The definitions and concepts presented above in the broad areas of - policy, the policy process and governance - provide an important underpinning of many of the research initiatives which are currently focusing on the relationship between natural resources (or NR) (and their management or NRM) and livelihoods (and poverty alleviation). In this section, the objective is to highlight 9 key issues and findings which have emerged recently from research, both theoretical and empirical, and which are likely to affect future policy in this domain. Where appropriate, specific examples from the fisheries sector have also been included. (i) Recognition: is the value of NR recognised by policy-makers? The extent to which the value (or importance) of NR is recognised by policy-makers will affect the extent to which the sector is able to contribute to development. If a government does not value, or even recognise the role of NR, then the sector will be denied support for policy design and implementation. According to DFID (2003, 2004a, 2004b, 2004c), for most developing countries, NR provide foundations for growth sectors: agriculture, forestry, fisheries and tourism. It is vital that the country’s wealth is recognised and harnessed to its full potential to promote pro-poor growth. Some of the fundamental questions which need to be addressed are: How much do the country’s main natural resource sectors (e.g. forestry, fisheries, wildlife tourism) contribute to economic growth? What percentage is this in terms of GDP? Does this take into account informal markets or illegal trade and how large are they? Is the importance of natural resources as inputs into other productive sectors understood and appreciated (e.g. water abstraction for hydro-electricity generation or rice production?). The international literature indicates that the ‘value’ of natural resources is not known well-known or recognised in many parts of the world (Neiland and Bennett, 2003). In the case of some NR systems the situation is very serious. For example, the wetlands of the Mekong region of SE Asia are central to the livelihoods of the majority of the rural people, but this ‘value’ is consistently underestimated by development planners and the rural poor lose out (Ratner et al. 2004). (ii) Information/assessment: is this sufficient to support policy and management decisions and allow reaction and adaptation to change? Recognition of the value of NR for development, and then decisions over how NR will be utilised within a national policy framework and through an appropriate NR management system requires a broad range of multi-disciplinary information. The type and quality of information will be determined by the assessment methods used and applied and the effectiveness of their integration within the policy process and management systems. In all the NR resource sub-sectors (forestry, fisheries, water etc) there has been an increased use of information from both the natural and social sciences, fundamentally to understand the bio-physical nature of NR, and the impact of human society on these systems directly through resource exploitation and indirectly through such effects as pollution. Approaches within the domains of D-87
  • 89. systems analysis, bio-economic modelling, ecological economics and environmental economics are helping to provide an improved basis for NR assessment and decision- making. However, the relationship between information systems and assessment and the nature and functioning of NR policy and management systems can be complex. For example, the case of the Peruvian anchovetta fishery (one of the largest fisheries in the world) is instructive (Glantz, 1983). It shows that simply generating new information and assessments, and then making them available to policy-makers will not be sufficient to ensure a high level of performance of a NR system (in this case a major fishery). NRM decisions will be influenced by a wide range of factors – political, economic, social etc. In the case of Peru, while policy-makers did not ignore the advice of scientists (whose information suggested an imminent fishery collapse), ultimately this advice was overshadowed by larger political factors and issues, which made it difficult to take ‘hard decisions’ in the time available. (iii) Policy narratives: do they include an appropriate conceptualisation of the relationship between NR and development (pathways, options)? The type of NR policy and NRM approach used by government and the relationship to development policy will be underpinned by a particular set of policy narratives. These narratives will be based upon a particular conceptualisation of the NR system, and will be used to describe key issues and how to deal with them. A good understanding of the relationship between the environment and NRM and livelihoods of people in both rural and urban areas is fundamental for policy development. In general, it is widely accepted that poor people in particular are highly dependent on NR (land, water, wood fuel and clean air) (DFID, 2004a). The state of the environment is therefore central to livelihoods, health and security of millions of people living in poverty and therefore to pro-poor growth (DFID, 2004a). Clearly, within the context of national policy-making, it is important therefore to ask: Is there an explicit understanding of the poverty-environment links within a country (in other words for health, livelihoods and vulnerability?) (DFID, EC, UNDP, WB, 2002). However, the relationship between NR and poverty reduction can be viewed from a number of perspectives. In some countries, NR will support large numbers of poor people, through direct participation in resource exploitation. In other countries, NR will contribute to livelihoods and poverty reduction indirectly, with indirect flows of benefits to society through taxation and re-distribution of NR activities. For example, in the case of fisheries, many countries have used policy narratives which emphasise the maximisation of fisheries production through technical interventions to generate a wide range of benefits for society. Unfortunately, these narratives and related approaches have underestimated the complexity of the fisheries development process and overall performance has been low (e.g. see the case of Mexican fisheries, Hernandez and Kempton, 2003). More recently, policy narratives which recognise a broad range of issues (technical, economic, social) have proved to be more successful as a basis for effective fisheries development policy and fisheries management (e.g. see the case of fisheries in Mauritania, Toueilib, 2002). D-88
  • 90. (iv) Nature of the policy process: is it dynamic, active and willing to adapt and take hard decisions? Is it transparent, evidence-based and accountable? The nature of the policy process itself is an important issue affecting NRM performance. The policy process includes both the design and implementation of policy, and it can be influenced and shaped by a wide range of factors. These factors include both the national policy context (is it supportive and enabling?), the ability and willingness of stakeholders to compromise and cooperate (is power distributed symmetrically?) and the effectiveness and credibility of decision-making processes (objective, transparent and accountable decision-making? Responsive and adaptable?). An interesting comparison, with respect to the nature of the policy process and its impact on NRM (fisheries), can be made between the Pacific Fisheries Forum Agency (FFA) (Mueller, 2003) and the Estonian-Russian Fishery Commission (ERFC) (Vetemaa et al. 2001). In the former case, the governments of the states involved recognise the economic importance of fisheries, and have been willing to cooperate and support the work of the FFA- the design and implementation of policy operates within an enabling environment which allows stakeholders to cooperate with one another, and to confidently put their trust in decision-making processes for the benefit of all participants. By comparison, in the case of the ERFC, the political and policy context has undergone major and rapid change in recent years, and the enabling environment for the fisheries policy process has yet to emerge – new institutions and organisations are still forming and learning about their roles, there are financial constraints to their operation associated with economic transition, and the relationship between stakeholders is often confused when vestiges of old institutions still remain in place. With regards to NR and the poverty reduction strategy process (PRS) in general in developing countries, DFID (2004b) has set out a range of key questions which should be addressed at each stage of analysis, formulation and implementation. These include questions relating to information for policy decision-making and also questions which focus on the nature of policy process itself. For example, at the PRS formulation process stage, the questions are asked: to what degree is the PRS process known among civil society and what has been their participation and influence in the development of the PRS document? What were the obstacles in integrating references to ENR issues and what have been overlooked in the PRS? What can be learned for the future revisions of the PRS document and other PRS processes, and what are the key next steps to improve pro-poor environmental outcomes through the PRS? Clearly, this approach represents a step-forward in attempting to better understand and manage the nature of the policy process. (v) Participation: do all relevant stakeholders contribute to the policy process? Globally, it is increasingly recognised that the effective management of natural resources requires the appropriate participation of a full range of stakeholders in both policy design and implementation. However, it is also recognised that in many countries, policy is made and then handed-down by central government with only D-89
  • 91. limited involvement by other stakeholders. Under ideal circumstances, the participation of stakeholders in the relevant national policy process will take place through various processes of consultation and flows of information between government and representativeness of key constituencies (e.g. forestry community organisations, fishing organisations etc). Within strong States, with well-established governance and institutions, constituencies of stakeholders would expect to have a ‘voice’ in national affairs relevant to their lives and work. However in weak States, the possibility for stakeholders to form constituencies and to have a ‘voice’ in national policy-making tends to be much reduced. In many situations, therefore the challenge is two-fold: first, to encourage wider participation in the policy process, and second, to ensure that the participation is appropriate and effective. With regards to a national poverty reduction strategy (PRS) process, DFID (2004b) asks to what extent the views and concerns of different groups within civil society have been considered at the initial analysis and planning stages, and what roles are these groups playing in PRS formulation and implementation. With regards to the fisheries sector, a recent (albeit limited) survey of 50 case-study fisheries from around the world, revealed that the participation of fishers and fisher organizations is relatively limited (Neiland and Bene, 2003). In a majority of countries, fisheries are controlled and managed by a centralized government administration which makes policy, and this is handed down to the local fisheries administration for implementation. However, there are some situations where this pattern is changing. For example, in Kerala, India, where coastal fisheries provide employment for thousands of small-scale and semi-industrial fishers, local fisher organisations and the National Federation of Fishworkers (NFF) have resisted policy decisions which impact adversely on their lives, and have established a ‘voice’ within the policy process (Reeves et al. 1997). However, this represents only a ‘partial’ success, since government does not have the full capacity or resources to always implement the policy decisions agreed with fishers. (vi) Laws: is there a well-established legal framework (as a basis for rights and actions)? The laws of a country will define the rights of stakeholders in relation to the exploitation of NR, and help to guide the operation of a NRM system through relevant regulations. The successful implementation of NR policy will depend, in part, on the right combination of regulatory tools, which must be appropriately defined (as rules or laws), implemented and enforced (with respect to the legal system of the country). However, there is much evidence to show that the definition and enforcement of laws for NR, which are mainly common pool resources, is a complex issue, with considerable variation in experience from different parts of the world. The importance of a well-designed and functional legal system to underpin fisheries policy and fisheries management can be illustrated by a comparison between Uganda and Cambodia, countries where inland fisheries underpin the livelihoods of thousands of rural households. The Government of Uganda has recognized and incorporated a series of amendments into its fisheries policy and fisheries laws to D-90
  • 92. facilitate and enable the development of a co-management approach to fisheries management (DFID, 2002). The legal amendments will pass the rights and responsibilities for fisheries management to a partnership between local communities and local government. There are good indications that these arrangements will lead to an improved fisheries management performance, with particular reference to poverty alleviation. In Cambodia, the necessary development and strengthening of the legal system, in general, will require more time and assistance (Degen and Thouk, 1998). For the time-being, the very large fisheries of the Tonle Sap and the Mekong Basin, in general, are operating within the context of a weak policy and legal environment. There is a significant asymmetrical economic and political relationship between the licenced ‘owners’ of major inland fisheries (e.g. Tonle Sap Lake) and the local communities, which means that the wealth of the fisheries is monopolised by relatively few individuals. In time, and with changes to the fisheries policy and law, there will be many possibilities for using the wealth from fisheries for economic development and poverty alleviation. The challenge remains as to how to bring this change about. (vii) Institutions: is there an appropriate institutional framework (organisations and rules)? The performance of a NRM system will be affected by the nature of the institutional framework within which it must operate. Institutions represent the framework of rules (both formal and informal) which define and govern the relationships between different stakeholders within the system (e.g. farmers-fishers-traders-government officers), and between the stakeholders and the NR (e.g. property rights over particular resources or benefit streams). Institutions are a fundamental part of governance. It is well-recognised that sustainable development and pro-poor growth will be supported or constrained by the institutional structures in-country (World Bank, 2003; World Resources Report, 2004). According to DFID (2004), some of the key issues which need to be addressed are: What access to NR do the more marginalized groups and those living in the vicinity have? How far is community ownership of natural resources the norm and/or encouraged? How is the issue of who collects and benefits from the revenues from NR use resolved? How do poor people benefit? Is there an indication of how this money going to government is to be reinvested into the economy? In the case of fisheries, there are a wide array of different institutional arrangements depending on the type of fishery, and the socio-economic, cultural and political characteristics of the associated stakeholders. The development of an appropriate institutional framework (or set of rules) for fisheries management will require the participation of all stakeholders. It must take into account existing institutional frameworks, both modern and traditional, and be prepared to deal with the difficulty of trying to modify or replace institutions in the face of this type of complexity. This in turn may require a long and gradual process of persuasion and consensus-building guided by effective leaders. D-91
  • 93. The impact of institutional arrangements on the performance of fisheries management systems varies throughout the world. For example, in northern Nigeria, where inland fisheries are an important component of rural livelihoods, fisheries management is complicated by the existence and interaction of both traditional and modern institutions, with new layers of institutions added over time as the nature of the State and the wider political context changes (Neiland et al., 2004). Within this large country and complex situation, it is difficult for the Fisheries Administration of the modern State of Nigeria, to impose a standard fisheries management approach, and to regulate the existing and diverse local fisheries management systems. In effect, therefore, the performance of fisheries management in northern Nigeria is directly related to local institutions – some of which perform well, and others which do not, in terms of poverty alleviation. By contrast, the institutional arrangements in many Pacific Island fisheries, which also support thousands of livelihoods, are relatively uncomplicated. For example, in the Cook Islands the management approach preferred by government is an ITQ system (Adams, 1998). Part of the reason for this relates to the role of the Aitutaki Island Council which has been able to involve the local communities in the management system, and all of the fishery stakeholders can relate and understand the institutions which have emerged – a simple blend of modern and traditional rules which have been legitimized by the involvement of the Council and the communities working with government leading to a successful fishery. (viii) Management capacity: is there an appropriate capacity to manage the NR (technically, financially etc)? The performance of NR management systems is related to the capacity of the management authority to make available the necessary management and technical skills, and to provide other assets. The management bodies (or administrative entities) have to operate within the context of agreed institutions or rules. They set objectives for management, and apply the necessary technical, human and financial (or assets) to achieve these objectives. Clearly, if a management organisation lacks this type of capacity, then the performance of the management system overall is likely to be impeded. An assessment of management capacity is an essential part of introducing co- management initiatives or transfers of responsibilities within NR systems. Capacity- building also requires careful design and implementation, but can have immediate and positive effects on target organizations and other entities such as community groups. (ix) Political will/desire: is there sufficient desire (incentives?) to manage NR effectively? The performance of NR management systems are influenced by political will and leadership. In many ways, this is an issue which cuts across all of the other nine issues above. In fundamental terms, the term ‘political will’ expresses the extent and nature of support which government and its policy-makers provide for a NR sector in real terms. Clearly, without the support of government and policy-makers to create D-92
  • 94. an enabling environment for policy design and implementation, the performance of NR systems (e.g. fisheries management systems) will almost certainly be constrained. However, creating an enabling environment is not sufficient, and effective fisheries management for example also requires a champion to take forward the changes that are inevitably involved. Political will or support from government for fisheries management is an essential prerequisite for the effective implementation of policy, and it most readily appears once the value of the fisheries is recognised. 4.4. POLICY ISSUES FOR THE FUTURE – A SUMMARY In summary, therefore, effective and appropriate government policy-making is essential for poverty alleviation and economic growth. Within the domain of natural resource management, and its role in development, it is important to understand the underlying relationship between the policy process and governance. Theoretical and empirical research has shown that there are a range of related factors – information, participation, institutions, legal frameworks, management capacity - which impact ultimately on the performance of natural resource management. However, in sectors such as fisheries, further research is needed to provide a better understanding of these factors, and how this might be used to improve policy design and implementation. With the domain of the environment and natural resources in general, there are at least three areas where a need for a better understanding and the application of new policy approaches for a better future appear to be given particular emphasis in the international literature, as follows: (i) Role of environment and natural resources in development: It has been noted that initiatives to improve growth – Poverty Reduction Strategy Papers (PRSPs), donor plans (e.g. DFID Country Assistance Plans) and other planning processes – have not always appreciated the environmental opportunities and risks for economic growth (DFID, 2004). To date, about 50 countries have prepared interim and full PRSPs, but only 12 of the 28 full PRSPs present some information on the baselines and targets in line with the Millennium Development Goal (MDG) 7: Ensuring Environmental Sustainability; and none of the 22 interim PRSPs present discussion on the long-term perspective (Bojo and Reddy, 2003). Within the PRSPs that present targets aligned with MDG7, attention is almost exclusively focused on water and sanitation. Bojo and Reddy (2003) conclude that a major effort is needed to raise the attention to MDG7 in the PRSPs. In fisheries, there is a need to clarify the role of this sector in national development strategies, and to understand the level and flow of benefits which can contribute to development (and poverty alleviation). (ii) Analysis and empirical work Three important perspectives on analytical and empirical work are prominent in the literature with reference to the role of natural resources (and environment) and development (and poverty alleviation): D-93
  • 95. First, there is still a great shortage of empirical work in all areas. For example, to document the contribution of particular sectors to economies, and to undertake comparisons with other sectors; to describe and value the contribution of NR to livelihoods; and to devise appropriate indicators for incorporation in PRSPs relevant to environmental management. Second, there is a need to develop an appropriate analytical framework linking natural resources to economic growth and poverty alleviation, which is holistic and which incorporates the political context and the nature of change over time. Steele (2004) has recently presented a draft framework which attempts to incorporate these important dimensions, and this represents an important starting point for future work. Reed (2004) also presents an analytical approach for use by a full range of stakeholders that ‘are seeking to change in fundamental ways, the dynamics of poverty and environmental degradation in rural areas of the developing world’. The approach is claimed to be distinguished from others (DFID – Livelihoods Approach, UNDP – Win-Win approach, and World Bank – PRSPs) by meeting three specific standards: (i) it must analyse the complex dynamics between the rural poor and the environment in specific locations; (ii) it must interpret relations between the local poverty-environment dynamics and policies and institutions at meso and macro levels in each country; and (iii) it must analyse relations between economic policy and institutional arrangements at the three levels as they affect poverty-environment dynamics. Third, fisheries sector analysis and planning is still dominated by consideration of the size of fish stocks and levels of production. There is a need to broaden the analysis to include a full range of cross-cutting and multi-disciplinary themes, with an emphasis on the design and implementation of appropriate policies and management systems. (iii) Policy and recommendations First, in order to maximize the contribution of the environment and natural resources in general to economic growth and poverty alleviation, policy-makers must address the range of issues highlighted in Section 3(above), and attempt to overcome possible constraints through appropriate actions. DFID (2004) has identified the following policy recommendations: - better understand the links between NR, the environment and economic growth; - maximize the economic benefits from NR sectors; - greater spending on NR and the environment; - maximise government revenues from environmental fiscal reforms; - recognize the economic costs of poor management; - remove environmentally damaging subsidies; - promote wise re-investment in other forms of capital and good governance; - better participation of the poor in natural resource-based growth; Second, for the fisheries sector, the central policy issue is that of improved fisheries management performance. For many countries, governments need to ensure that appropriate fisheries management systems and authorities are encouraged to be D-94
  • 96. proactive in pursuing certain critical issues that if tackled can achieve this goal including improved fisheries governance, establishing rights and ending open-access arrangements, developing an appropriate fisheries management authority, methods to realise wealth from a fishery, and dealing with transition (making explicit the costs and benefits of change) (World Bank/SIFAR, 2004). 4.5. REFERENCES AND ADDITIONAL READING Barenstein, E. (1994) Overcoming Fuzzy Governance in Bangladesh. Dhaka: University Press Ltd. Bojo, J. and Reddy, R.C. (2003) Poverty Reduction Strategies and the Millennium Development Goal on Environmental Sustainability. Opportunities for Alignment. Environmental Economics Series Paper No. 92. Washington DC: The World Bank. Brown, M.B. (1995) Models in Political Economy. A Guide to the Arguments. London: Penguin. Collier, P. and Gunning, J.W. (1999) Explaining African Economic Performance. Conference paper: Opening and Liberalisation of Markets in Africa. (http://www.dse.de/ef/papers/coll-gun.htm). Degen, P. and Thuok, N. (1998) Inland Fishery Management in Cambodia: Is the Fishing Lot System the Basis for Improved Management or Should it be Abolished? Crossing Boundaries, 7th Annual Conference of the International Association for the Study of Common Property. Vancouver: IASCP. Dethier, J.J. (1999) Governance and Economic Performance. A Survey. Center for Development Research, University of Bonn. ZEF Discussion Papers on Development Policy No. 5. DFID (2003) Environmental Wealth Diagnostic. Report. London: DFID. DFID (2004a) Pro-Poor Growth: A Guidance Note to Assess the Contribution of Natural Resources and the Environment. London: DFID. Mimeo. DFID (2004b) Contribution of the Environment and Natural Resources to Pro-Poor Growth: A Checklist Examining these Issues within a Poverty Reduction Strategy. DFID How to Note. London: DFID. DFID (2004c) Unlocking the Potential for Pro-Poor Growth: Natural Resources, Governance and Economic Development. London: DFID. Mimeo. DFID, EC, UNDP and WB (2002) Linking Poverty Reduction and Environmental Management – Policy Challenges and Opportunities. Department for International Development (DFID), European Commission (EC), United Nations Development Fund (UNDP) and the World Bank (WB), August 2002. D-95
  • 97. Dreze, J. and Sen, A (1995) India: Economic Development and Social Opportunity. Dehli: Oxford University Press. Glantz, (1983) The Peruvian Anchovetta Fishery. Hernandez, A. and Kempton, W. (2003) Changes in Fisheries Management in Mexico: Effects of Increasing Scientific Input and Public Participation. Ocean and Coastal Management 46: 507-526. Keeley, J. and Scoones, I. (1999) Understanding Environmental Policy Processes: A Review. IDS Working Paper No. 89. Brighton: Institute of Development Studies. Kooiman, J. (2001) Fisheries Governance and Food Security. Paper for the EU- INCO Project FISHGOVFOOD. Brussels: European Union. Hussain, I. (2004) (Project Leader) Pro-Poor Intervention Strategies in Irrigated Agriculture in Asia: Issues, Lessons and Guidelines – Bangladesh, China, India, Indonesia, Pakistan and Vietnam. Report of the International Water Management Institute (IWMI). (http://www.iwmi.org/propoor). Lipton, M. (1976) Why Poor People Stay Poor. Meier, G.M. (1995) Leading Issues in Economic Development. New York, Oxford: Oxford University Press. MacNamara, R.S. (1972) Address to the Board of Governors, 25 September. Washington DC: The World Bank. Neiland, A.E. and Bene, C. (2003) A Review of Fisheries Management Performance in Developing Countries, with Particular Reference to Issues of Policy and Governance. Report prepared for UN FAO/SIFAR. Rome: FAO. Neiland, A.E. and Bennett, E. (2003) Initiate the Learning Process: Legal, Institutional and Policy Issues Affecting Access to Common Pool Resources (CPR). Report for DFID/PASS. Neiland A.E., Bennett, E., and Lewins, R. (2002) A Review of Fisheries Policy in Bangladesh. Report for the DFID Bangladesh Fisheries Review. London: Department for International Development. Neiland, A.E., Madakan, S.P. and Bene, C. (2005) Traditional Management Systems, Poverty and Change in the Arid Zone Fisheries of Northern Nigeria. J.Agrarian Change 5(1): 117-149. Ratner, B., Dang Thanh Ha, Mam Kosal, Ayut Nissapa and Somphanh Chanphengxay (2004) Undervalued and Overlooked: Sustaining Rural Livelihoods through Better Governance of Wetlands. WorldFish Center Studies and Reviews No. 28. Penang: WorldFish Center. D-96
  • 98. Reed, D. (2004) Analyzing the Political Economy of Poverty and Ecological Disruption. Report. WWF Macroeconomics Program Office. Washington DC: WWF. Reeves, P., Pokrant, B. and McGuire, J. (1997) The Right to the Sea: The Struggle for Artisanal Fishers in Kerala since 1980. http: www.virginia.edu/soasia/symsem/kisan/papers/kerala.html Steele, P. (2004) Pro-Poor Growth or Boom and Bust? Coalitions for Change to Sustain and Increase the Contribution of Natural Resources to Pro-Poor Growth. A draft framework prepared under the auspices of the OECD DAC ENVIRONET. Sutton, R. (1999) The Policy Process: An Overview. Overseas Development Institute (ODI), Working Paper No. 118. London: ODI. USAID (2004) Nature, Wealth and Power. Emerging Best Practice for Revitalising Rural Africa. Report by USAID in collaboration with Centre for International Forestry Research (CIFOR), WinRock International, WRI and IRG. Washington DC: USAID. Williamson, J.G. (1991) Inequality, Poverty and History. World Bank (1997) Governance. The World Bank’s Experience. Washington DC: The World Bank. D-97