 Thus, the most in#uential theoretical studies in "sheries economics [1}5] as well as the textbooks [6}8] all derive optimal harvesting programs ignoring the cost of implementing these programs. Empirical modeling, presumably taking its cue from the theoretical models, also largely ignores the costs of management [9}12], and Schrank et al. [13]. Noteworthy exceptions are Sutinen and Andersen [14] and Anderson and Lee [15]. * Corresponding author. Tel.: #47-55-95-92-60; fax: #47-55-95- 95-43. Marine Policy 24 (2000) 233 } 243 Costs of "sheries management: the cases of Iceland, Norway and Newfoundland Ragnar Arnason, Ro K gnvaldur Hannesson*, William E. Schrank Department of Economics, University of Iceland, Iceland Centre for Fisheries Economics, The Norwegian School of Economics and Business Administration, Helleveien 30, 5045 Bergen, Norway Department of Economics, Memorial University of Newfoundland, Canada Received 1 August 1999; accepted 1 October 1999 Abstract This paper reports on the results of an investigation of management costs in the "sheries of Iceland, Newfoundland and Norway and discusses them in a more general framework. Management costs are de"ned as costs necessary to overcome the problems associated with common property. The question of whether management costs should be paid by industry is discussed, as is the likely e!ect of user pay on the e$ciency with which management is provided. Since management has public goods characteristics, it is likely that there is an unavoidable role for government in providing these services. The question of who pays for it is separate, and recovering costs from industry has both e$ciency and optimal taxation aspects. A greater involvement in management by industry further raises the question of compatibility between the industry's interests and the public interest. Measured as percent of gross value of "sh landings the management costs are by far highest in Newfoundland (15}25%), lowest in Iceland (about 3%), with Norway in the middle (about 10%). Management costs thus appear to be substantial and quite variable. This gives rise to three conclusions. First, when calculating optimal harvesting and investment paths one must take the management costs of implementing these paths explicitly into account. Second, what is the economic e$ciency of management? Could the same level of bene"ts be produced at lower costs? Third, can "sheries management expenditures of the magnitude discussed be justi"ed in the sense that the bene"ts exceed the costs?  2000 Elsevier Science Ltd. All rights reserved. Keywords: Fisheries economics; Fisheries management; Cost recovery; Common property 1. Introduction The need for "sheries management stems funda- mentally from the fact that "sh resources are common property. It is well known, both from theory and experience, that common property resources will be overexploited and possibly irreversibly depleted unless subjected to appropriate "sheries management. Due to the pervasive external e!ects involved in the "shing activity, "sheries management is clearly beyond the reach of any single agent. Fisheries management requires either collective action at the industry level or outside intervention. Taking it for granted that the purpose of "sheries management is to increase the #ow of net economic bene"ts from the "shing activity, the costs of operating the "sheries management system itself are obviously among those that have to be subtracted to arrive at the net bene"ts of "shing. This means that the cost of man- agement will, in general, in#uence the optimal manage- ment of the "shery. In spite of these rather obvious truths, the cost of "sheries management has hitherto received scant attention in the academic literature on "sheries economics.  A possible explanation for this omission is the implicit assumption that management costs are generally small relative to their bene"ts and 0308-597X/00/$ - see front matter  2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 8 - 5 9 7 X ( 9 9 ) 0 0 0 2 9 - 9