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Technical Change and The Commons

Author

Listed:
  • Dale Squires

    (U.S. National Marine Fisheries Service)

  • Niels Vestergaard

    (University of Southern Denmark)

Abstract

This paper addresses normative exploitation of common renewable resources with changes in technology and technical, allocative, and scale efficiency that exacerbate the commons problem and externality. Their impact depends on the rate and nature of change, investment, and state of property rights. An augmented fundamental equation of renewable resources with a modified marginal stock effect and a new marginal technology effect account for changes in disembodied and embodied technology and technical efficiency. Neglecting these changes generates misleading policy advice and dynamic inefficiency with overaccumulation of physical and natural capital and sizable foregone rents. An empirical application illustrates. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Dale Squires & Niels Vestergaard, 2013. "Technical Change and The Commons," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1769-1787, December.
    • Handle: RePEc:tpr:restat:v:95:y:2013:i:5:p:1769-1787
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00346
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    More about this item

    Keywords

    technical change; common renewable resources; fundamental equation of renewable resources; economic efficiency; investment;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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