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Asia and Latin America. One could argue in most
of these cases that the weakness of the internal
political and economic structures made it likely
that they would become dependent upon other
nations during the late nineteenth and early
twentieth centuries.
With the advent of mass tourism, even those
countries that were not sought out for their mineral
deposits, slave labour, strategic military locations or
agricultural climates were inevitably going to be
brought into the dependency chain. But dependency
theory may also relate to domestic
tourism where sparsely populated peripheral
regions find that their economic structures have
been distorted by the demands derived by tourism
activity. Many issues surrounding tourism developments,
such as second homes, often involve
dependency. For instance, the land and general
price inflation that may be associated with tourism
development may make it impossible for local
residents to purchase their own homes or to survive
in the area while engaged in more traditional
industries. This then makes the local economy
dependent upon tourism for its survival. The
underlying thesis of dependency theory is that the
so-called developed areas are subject to sustained
indigenous growth, whereas underdeveloped areas
exhibit reliance upon external factors and, as such,
derive their growth from the developed or
`metropolitan' areas: hence the term dependency.
This theory has been criticised on a number of
grounds, including the suggestion that the infrastructure
of the dependent countries have been
improved as a part of the derived development.
Tourism provides a number of stimuli, from foreign
investment to the increases in domestic demand,
that can all assist indigenous development.
deregulation, airline
JOHN FLETCHER, UK
A market is considered to be reasonably competitive
if relatively there are a large number of
buyers and sellers, product and services offerings
are homogeneous, buyers and sellers have
`perfect' information, and exit and entry are easy.
No industry has so challenged theories of competi-
tion and regulation than the airline industry.
Seven decades after initial promotion, six decades
after initial regulation and over two decades since
deregulation, airline market competitiveness remains
problematic for policy makers and decision
makers alike.
Governments actively promoted airlines during
the industry's infancy. To nurture the fledgling
industry, governments funnelled money to aircraft
manufacturers and operators. Airmail contracts
were a favoured means of promoting growth of the
industry throughout the 1920s. This unbridled
promotion led to instability and airlines came and
went. While perhaps commercially acceptable, the
safety record associated with instability was not.
To meet national public interest and defence needs,
the industry was regulated beginning in the 1930s.
Airline regulation and promotion followed a
classic model. Entry and exit were restricted.
Regulated trusts were tolerated and encouraged
through joint discussion and publication of tariffs.
Promotions and subsidies were freely offered
through a variety of means. During the 1970s,
some in the United States and other nations
began to question the economic rationale for, and
benefits of, regulation. Alfred Kahn became an
eloquent and outspoken advocate of deregulation
in this country. Other nations soon followed.
US domestic air cargo service was deregulated
in 1977 and passenger airline service in 1978. The
first attempt to deregulate international airline
services was launched by the US in 1980. The
European Union followed suit in the late 1980s,
committing to deregulation in 1992. Other nations
± notably in Asia, the Pacific, the Caribbean and
Latin America ± have joined and others may soon
join the fray �see international aviation liberalisation).
Further reading
deregulation, airline 143
Button, K.J. �1996) Àviation deregulation in the
European Union: do actors learn in the regulation
game?', Contemporary Economic Policy 14�1):
70±81. �Examines how European policymakers
and airlines have learned from US deregulation.)
Meyer, J.R. and Strong, J.S. �1992) `From closed set
to open set deregulation: an assessment of the
U.S. airline industry', Logistics and Transportation