Ecosystem considerations in a second-best world

Species' interactions and the involvement of fishermen in several fisheries may not be properly accounted for by regulatory schemes,thus making regulation suboptimal. Being the only implementable instruments, the degree of ineffciency of three second-best instruments is assessed (by using a bioeconomic multispecies model) in terms of their ability to get close to socially optimal effort and stock levels. The type of regulation and the existing biological interaction are also shown to result in different impacts on effort re-allocation: a specific regulation does not necessarily increase the pressure on the unregulated species. Finally, we discuss how the choice of which second-best policy to implement is situation-specific.