Does International Trade Cause Overfishing?

This paper investigates whether and how openness to international trade affects overfishing in national exclusive economic zones (EEZ). Brander and Taylor propose two scenarios: trade liberalization may fuel the overuse of renewable resources in countries that allow open access to the resource, or, alternatively, it may dampen such overuse in unregulated harvesting countries. Based on panel data from the Sea Around Us project on fish stock collapse and overuse in national EEZs, I test these competing theoretical predictions. Using fixed effects and system-GMM estimation, I find that the effect of openness on the level of overuse of fish species depends on the relative level of governance. Most specifications suggest that opening trade reduces fish stock collapse and overuse in countries with lax governance, while it does not significantly affect overexploitation in countries that exhibit high levels of governance.