Open Ties, Open Skies: Determinants of Aviation Liberalization

Abstract

International aviation is governed by an uneven patchwork of bilateral air services agreements rather than a uniform global regime of market access. While economic factors surely play a significant role in the development of these agreements, they do not fully explain why some country pairs agree to deeper, more “open” policies than others. This thesis examines whether political alignment, conceptualized by shared foreign-policy beliefs, is associated with greater depth in bilateral aviation liberalization among dyads with an air services agreement already in place. Primarily, I argue that such alignment may reduce the perceived strategic risks of granting foreign firms access to a sovereignty-sensitive sector. Using a cross-sectional dataset of in-force agreements through 2023 from the World Trade Organization, the depth of liberalization is measured via the Air Liberalization Index and evaluated against political alignment, operationalized primarily by United Nations General Assembly ideal-point distances. A series of OLS regressions and interaction tests provides qualified support for my claim. Among non-U.S. dyads, politically distant states tend to maintain less liberal bilateral agreements. However, this association is most pronounced when bilateral bargaining is not preceded by shared plurilateral commitments. Additionally, the United States is confirmed as a distinctive outlier, enabled by its unique structural bargaining power. Qualitative case studies of East Asian dyads confirm these patterns but provide examples where strong commercial demand and prior aviation cooperation weaken the association between political distance and restricted aviation access. Ultimately, this thesis suggests that the depth of bilateral aviation agreements reflects, at least in part, the foreign policy relationships of the states involved.