Contents lists available at ScienceDirect Ecological Economics journal homepage: www.elsevier.com/locate/ecolecon Analysis Productivity, Social Capital and Perceived Environmental Threats in Small- Island Fisheries: Insights from Indonesia Satoshi Yamazaki a,b, ⁎ , Budy P. Resosudarmo c , Wardis Girsang d , Eriko Hoshino a,e a Tasmanian School of Business and Economics, University of Tasmania, TAS, Australia b Centre for Marine Socioecology, University of Tasmania, TAS, Australia c Indonesia Project, Arndt-Corden Department of Economics, Crawford School of Public Policy, Australian National University, ACT, Australia d Faculty of Agriculture, University of Pattimura, Indonesia e CSIRO Oceans and Atmosphere, Hobart, TAS, Australia ARTICLE INFO Keywords: Artisanal Fisheries Developing Countries Technical Efficiency Capacity Utilization Indonesia Small Islands ABSTRACT Small-island communities in developing countries rely heavily on wild fisheries to meet the communities' food and livelihood needs. These communities' remoteness, insularity and the small size of the local economy make the fishery production sensitive to the way in which fishers interact with other community members and to local environmental changes. This paper investigates how social capital and environmental threats to local fishing activities are associated with fishery productivity using the data collected in a small-island fishing community in Indonesia. We estimate the technical efficiency and capacity utilization, and examine how these measures are related to the social capital built around the island community. The impacts of environmental changes that are perceived as threats to local fishing activities are also evaluated. We find that inefficiency in the fisheries' production is correlated with whether fishers are tied to community members outside their own fishing groups and whether they are exposed to environmental threats, the sources of which are internal and external to the fisheries system. The underutilization of existing capacity is evident for fishers who receive government aid for fishing equipment and those who perceive population growth and aquaculture development as a threat to their fishing activities. 1. Introduction The economic development of small islands is often lagged relative to other regions due to the islands' remoteness and insularity, forcing the island communities to face unique challenges (Briguglio, 1995). In such environments, artisanal fisheries play a crucial role in providing food and income and being a driver for the island economy (Stobutzki et al., 2006; Zeller et al., 2006). Their contribution to food security is well recognized as a large proportion of the catch is not exported but either traded locally or consumed by fishers and their families (Béné et al., 2007; Food and Agriculture Organization [FAO], 2014; World Fish Center, 2011). The small size of the local economy and the isolated location, however, make the fisheries' production sensitive to many factors, including social interactions among community members and environmental threats, such as depletion of fish stocks and the de- gradation of inshore habitats (Andrew et al., 2007; Béné et al., 2010; Cinner et al., 2012; Lovatelli et al., 2004). The influence of social relations, particularly in the form of social capital, on success in community governance and resource management has long been studied in the literature, including seminal works by Ostrom (1990, 1999), Bowles and Herbert (2002) and Pretty (2003). Despite various definitions and interpretations in the literature, social capital is broadly considered a form of connectedness of individuals to their communities (Dasgupta and Serageldin, 2000). Ostrom and Ahn (2003) suggested that social capital takes three major forms: trust- worthiness, networks and institutions that facilitate a set of formal and informal rules shared among community members. In fisheries, Grafton (2005) highlighted the mechanism of how social capital, as represented by connections within fishing communities, helps to promote better fishery management practices. Holland et al. (2013, 2015) derived empirical measures of social capital in the New England groundfish fishery and showed how different forms of social capital relate to the economic performance of the fishery sector. In the context of artisanal fisheries, previous studies showed that social capital can enhance the ability for conflict resolution and self-regulation of fishery resource extraction (Marín et al., 2012; Sekhar, 2007; Yamazaki et al., 2018). However, these potential benefits may be hindered or lost if re- source users face environmental threats. For instance, recent theoretical https://doi.org/10.1016/j.ecolecon.2018.05.020 Received 16 August 2017; Received in revised form 19 March 2018; Accepted 25 May 2018 ⁎ Corresponding author at: Tasmanian School of Business and Economics, University of Tasmania, Private Bag 84, Hobart, Tasmania, 7001, Australia. E-mail address: Satoshi.Yamazaki@utas.edu.au (S. Yamazaki). Ecological Economics 152 (2018) 62–75 0921-8009/ © 2018 Elsevier B.V. All rights reserved. T