UC Davis Agricultural and Resource Economics

AAEA Presentation by Amanda R. Lindsay: Evaluating local impacts of marine-based stimulus policies amid market imperfections in rural Indonesia

July 26, 2017

Advisor: James N. Sanchirico and  James E. Wilen
Fields: Natural Resource Management, Environmental Economics, Industrial Organization

Time: Tuesday, August 1st, 4:45 pm – 6:15 pm
Location: Michigan Room

Countries all over the world have pledged commitments to managing marine ecosystems in a way that promotes both conservation and sustainable development. The Indonesian government has been a leader, introducing its Blue Economy Initiative at Rio +20 in 2012, a paradigm prioritizing marine policies that encourage sustainable development of fisheries. However, marine-based economic stimulus policies are often implemented without addressing underlying the market failure driving overharvest and ecosystem degradation. Additional market failures, common to rural economies in developing countries, can further distort household response to marine development policies. Utilizing a one of a kind household and business data set, we measure direct and indirect effects of common marine policies on local economies and ecosystems using a bioeconomic, general equilibrium model. While the marine stimulus policies are being implemented in locations throughout Indonesia, this study focuses on Selayar Island, located just south of Sulawesi Island. This rural coastal economy is an excellent location to develop insights into the effects of government interventions on rural coastal economies. Through simulation of the structural model, we illustrate the local impacts of one of Indonesia’s recent marine fisheries policies: provisioning of fishing boats and gear to support offshore fisheries. The steps taken to characterize fishing production and household capital allow us to depict household response to policies, demonstrating to what extent supporting small-scale fishermen can achieve poverty alleviation and conservation objectives. Estimates of local economy-wide effects can help us re-examine blue policy initiatives being employed in developing countries around the world.

 

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