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AI-tocracy

Author

Listed:
  • Martin Beraja
  • Andrew Kao
  • David Y. Yang
  • Noam Yuchtman
Abstract
Can frontier innovation be sustained under autocracy? We argue that innovation and autocracy can be mutually reinforcing when: (i) the new technology bolsters the autocrat's power; and (ii) the autocrat's demand for the technology stimulates further innovation in applications beyond those benefiting it directly. We test for such a mutually reinforcing relationship in the context of facial recognition AI in China. To do so, we gather comprehensive data on AI firms and government procurement con-tracts, as well as on social unrest across China during the last decade. We first show that autocrats benefit from AI: local unrest leads to greater government procurement of facial recognition AI, and increased AI procurement suppresses subsequent unrest. We then show that AI innovation benefits from autocrats' suppression of unrest: the contracted AI firms innovate more both for the government and commercial markets. Taken together, these results suggest the possibility of sustained AI innovation under the Chinese regime: AI innovation entrenches the regime, and the regime's investment in AI for political control stimulates further frontier innovation.

Suggested Citation

  • Martin Beraja & Andrew Kao & David Y. Yang & Noam Yuchtman, 2021. "AI-tocracy," POID Working Papers 020, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:poidwp:020
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    artificial intelligence; autocracy; innovation; data; China; surveillance; political unrest;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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