Introducing market-based reforms to manage overcapacity in Norway

This case study reviews the process of introducing market-based reforms to manage over-capacity in the Norwegian fisheries sector. The fisheries sector is a politically important sector in Norway due in large part to the high regional concentration of the industry and the organised influence of the fishers’ organisations. These factors played a significant role when it was decided to introduce market-based management reforms into the sector to help address the problems of overcapacity, low profitability and depleted stocks. The process of reform, which essentially began in the 1990s, was strongly influenced by distributional considerations, a fear of privatisation of the commons through the use of ITQs, and the diverse views of the different fleet segments. The establishment of the vessel-based quota system was a reaction to this and issues surrounding the system’s design, allocation keys for the quota and the longevity of the system were strongly debated. The system continued to evolve with extensive discussion within the sector, and further refinements to the quota system (involving the Structural Quota System and the trial Quota Exchange System) were introduced in 2003, followed by later adjustments in 2005 and 2007.