Revisionism Revised? Airline Deregulation and the Public Interest

Modern theories of regulation should be reexamined in light of recent deregulation activity. Modern "revisionist" theories of regulation are derived from A. Downs's demonstration that a public official will maximize his own welfare by pursuing policies that provide identifiable benefits to groups that are well-organized politically (An Economic Theory of Democracy, 1957, additional publication information not provided). Various commentators have explained the fact that much regulation is inefficient by showing that there are groups that benefit from the inefficient regulation, & that those groups support both establishing & continuing regulation. These theories are couched in terms that do not predict or account for the dismantling of any regulatory scheme that is providing benefits to some groups at the expense of the general public. Unfortunately for this view of the process, the last several years have seen deregulation of airlines, trucking, brokerage commissions, cable TV, & others. Perhaps "bad" regulation is the product of mistakes rather than the inevitable product of a democratic political system. Airline deregulation is examined in detail & seems to support resurrection in modified form of the "public interest" theory of regulatory origin previously thought obsolete. Modified AA.