Working Paper: CEPR ID: DP530
Authors: Thorvaldur Gylfason
Abstract: A structural reform of the Icelandic fishing industry which created the conditions for fair and free trade in fishing permits in Icelandic waters could conceivably remove the main current obstacle to EC membership for Iceland. This reform would grant other EC nations formal access to the market for fishing permits, as opposed to access to the resource itself. Many of the arguments presented also apply to Norway. The paper also discusses briefly, similar market solutions to problems arising in the process of economic integration in Europe related to oil extraction, forestry, environmental pollution and traffic congestion.
Keywords: Iceland; EC membership; fisheries; natural resources; environment; Norway
JEL Codes: 421; 423; 721
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Structural reforms in the Icelandic fishing industry (L16) | Increased economic efficiency (D61) |
| Market for fishing permits (Q22) | Enhanced economic efficiency in the Icelandic fishing industry (Q22) |
| Current quota system (D45) | Insufficient incentives for firms to buy permits from less efficient operators (D22) |
| Selling or taxing fishing permits (Q27) | Substantial government revenue (H27) |
| Substantial government revenue (H27) | Elimination of personal and corporate income taxes (H24) |
| Structural reforms in the Icelandic fishing industry (L16) | Potential GDP growth of up to 4% per year for Iceland (F43) |
| Structural reforms in the Icelandic fishing industry (L16) | Alleviation of inflationary pressures (E31) |