Strategic enhancement and destruction of fisheries and the environment in the presence of international externalities
Copeland, B.R.
This paper considers enhancement of fisheries and the environment in the presence of international externalities. By enhancement we refer to investments which affect the costs and benefits of controlling fish harvest rates or pollution emission levels. In a two-country, two-period model, it is shown that enhancement may be used strategically to influence the behavior of rival governments, and that the strategic effect may either offset or reinforce the standard free rider problem associated with such investment. In some cases, countries may have an incentive to invest in environmental destruction (i.e., negative enhancement) if policies are not coordinated internationally.
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