Transatlantic Lessons in Aviation Deregulation: EEC and US Experiences

Published date01 March 1992
Date01 March 1992
DOIhttp://doi.org/10.1177/0003603X9203700110
Subject MatterArticle
The Antitrust Bulletin/Spring 1992
Transatlantic lessons in aviation
deregulation: EEC and
US experiences
BY KENNETH J. BUTTON* and DENNIS SWANN**
I.
Introduction
207
Since the mid-1970's in both the United States and in the Euro-
pean Community the topic that increasingly dominated microeco-
nomic policy discussions was the possibility of, and the potential
benefits to be derived from, rolling back the frontiers
of
the state.1
Within the states that comprise the European Community- the
debate first began to gather pace in the United Kingdom and fol-
lowed the electoral defeat sustained by the Conservative Party in
*Professor of Applied Economics and Transport and Director
of
the
Applied
Microeconomics
Research
Group,
Loughborough
University,
England.
** Professor
of
Economics, Loughborough University, England.
1See
THE
AGE
OF
REGULATORY
REFORM
(K.J. Button &D.
Swann
eds. 1989); D.
SWANN,
THE
RETREAT
OF
THE
STATE
(1988).
2
Current
members are Germany, France, Italy,
United
Kingdom,
the
Netherlands, Belgium, Spain, Greece, Denmark, Portugal, the Irish
Republic and Luxembourg.
e1992 by Federal Legal Publications, Inc.
208 : The antitrustbulletin
1974.
The
party had strayed into the
interventionist
territory
under the Heath government and out of office it sought to find a
new philosophy and a new role. The new direction it ultimately
identified was one that involved adetermined retreat from state
microeconomic involvements in industry. Subsequently the debate
became Europe-wide> largely as a result of two factors. The first
was the considerable interest aroused on the continental mainland
by the privatization program introduced by successive administra-
tions presided over by Margaret Thatcher in the United Kingdom.
The
second
was the equally considerable attention
evoked
in
Western
Europe
by the deregulatory initiatives
of
the United
States Congress in the Carter and Reagan years and by the think-
ing that lay behind those actions. The draconian nature
of
the con-
gressional approach to federal air passenger transport regulation
in particular attracted keen, indeed universal, interest.
As we have already indicated, the transatlantic debate was
much concerned with the potential benefits of both deregulation
and privatization. In the United States the focus was on the dereg-
ulatory aspect since economic regulation had been the preferred
vehicle of control whilst public enterprise was relatively unimpor-
tant as compared with the position in Western Europe. In Western
Europe on the other hand, a good deal of economic activity in the
post-war period was conducted through the medium
of
the public
enterprise. As a result, European policy-makers were particularly
attracted by the possible benefits of privatization since there was
considerable scope at the national level for a change in the pub-
lic/private balance
of
activity. However, economic regulation was
not absent from the scene and the possible benefits
of
aderegula-
tory stance did not escape