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Open skies over the Middle East

Anca Cristea (), Russell Hillberry and Aaditya Mattoo

No 6937, Policy Research Working Paper Series from The World Bank

Abstract: The dynamism of air traffic markets in the Middle East obscures the persistence of restrictions on international competition. But how important are such restrictions for passenger traffic? This paper uses detailed data on worldwide passenger aviation to estimate the effect of air transport policy on international air traffic. The policy variable is a quantitative measure of the commitments under international agreements. The paper analyzes, for the first time, not only bilateral agreements, but also plurilateral agreements such as the one between Arab states. The analysis finds that more liberal policy is associated with greater passenger traffic between countries. Higher traffic levels appear to be driven primarily by larger numbers of city pairs being served, rather than by more passengers traveling along given routes. To demonstrate the quantitative implication of the estimates, two liberalization scenarios in the Middle East are evaluated. Deepening the plurilateral agreement among Arab states would lead to a 30 percent increase in intraregional passenger traffic. Widening the agreement to include Turkey would generate significantly larger gains because current policy vis-à-vis Turkey is much more restrictive.

Keywords: Transport Economics Policy&Planning; Airports and Air Services; Roads&Highways; Public Sector Corruption&Anticorruption Measures; Air Quality&Clean Air (search for similar items in EconPapers)
Date: 2014-06-01
New Economics Papers: this item is included in nep-ara and nep-tre
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Journal Article: Open Skies over the Middle East (2015) Downloads
Working Paper: Open Skies over the Middle East (2014) Downloads
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