The Bay of Bengal\'s basin contains some of the most populous regions of the ear

Question

The Bay of Bengal's basin contains some of the most populous regions of the earth. No less than a quarter of the world's population is concentrated in the eight countries that border the bay. Approximately 200 million people live along the Bay of Bengal's coasts and of these a major proportion are partially or wholly dependent on its fisheries. The fisheries of the Bay of Bengal have been under pressure for decades and are now severely depleted. Many once-abundant species have all but disappeared. Catches now consist mainly of species like sardines, which are at the bottom of the marine food web. Attempts have been made to regulate fishing in the bay but they have been largely ineffective. In 2015 Sri Lankan authorities claimed to have spotted 40,544 Indian trawlers in Sri Lanka's territorial waters. Conversely, many Sri Lankan tuna fishermen have also been arrested in India. In Myanmar, until a ban was enacted in 2014, the catch collected by foreign fishing boats was 100 times greater than that of local fishermen.At night specially equipped, long-armed boats materialize around the islands and shine high-powered green lights into the water to attract plankton and the squid that follow in their wake

Explanation / Answer

This has been the case of negative extranality as well as tradegy of commons.

Market failure is due to non existent of market. Due non existent market there is no price to trade. If there are no prices than the quantity produced doesn't offer right signals . Thus it causes market failure.

Another explanation could be that fisher man keeps fishing till marginal benefits is equalised to marginal cost. Since marginal cost of fishing is zero the fisherman keeps fishing till marginal benefits become zero.

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