The New Institutions of Transatlantic Aviation
Institut Barcelona d'Estudis Internacionals - IBEI
Max Planck Institute for Research on Collective Goods; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)
November 1, 2010
IBEI Working Papers 2010/32
This article focuses on the institutions of transatlantic aviation since 1945, and aims at extracting from this historical process topical policy implications. Using the methodology of an analytic narrative, we describe and explain the creation of the international cartel institutions in the 1940s, their operation throughout the 1950s and 60s, their increasing vulnerability in the 1970s, and then the progressive liberalization of the whole system. Our analytic narrative has a natural end, marked by the signing of an Open Skies Agreement between the US and the EU in 2007. We place particular explanatory power on (a) the progressive liberalization of the US domestic market, and (b) the active role of the European Commission in Europe. More specifically, we explain these developments using two frameworks. First, a “political limit pricing” model, which seemed promising, then failed, and then seemed promising again because it failed. Second, a strategic bargaining model inspired by Susanne Schmidt’s analysis of how the European Commission uses the threat of infringement proceedings to force member governments into line and obtain the sole negotiating power in transatlantic aviation.
Number of Pages in PDF File: 20
Keywords: Trade Liberalization, Transatlantic Agreements, Aviation, Open Skies, European Politicsworking papers series
Date posted: November 18, 2010
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