IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v179y2026ics0304387825002445.html

Electoral politics over automation in a dual economy

Author

Listed:
  • Roy, Jaideep
  • Saha, Bibhas

Abstract

When automation in a developing economy displaces low-skilled workers in the advanced sector, backward sector wages may fall due to in-migration of the ‘newly’ unemployed. Fear of job and income loss may then induce office-seeking political parties to announce regulatory policies on automation for electoral success. We show that absent sectoral spillover, democratic adoption of automation is relatively higher and protects only high-skilled jobs in the advanced sector. However, the possibility of spillover limits this adoption. More specifically, if the backward sector is large, automation faces full resistance. In contrast, if the advanced sector is large, automation is moderate, making only the low-skilled jobs vulnerable. But these vulnerable workers, unlike their counterparts in the backward sector, may prefer automation because their advanced-sector wages fall below the severance pay plus backward-sector opportunities. When neither sector is large, the size of automation becomes uncertain, pushing similar economies into different growth paths.

Suggested Citation

  • Roy, Jaideep & Saha, Bibhas, 2026. "Electoral politics over automation in a dual economy," Journal of Development Economics, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:deveco:v:179:y:2026:i:c:s0304387825002445
    DOI: 10.1016/j.jdeveco.2025.103693
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387825002445
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2025.103693?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D20 - Microeconomics - - Production and Organizations - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:179:y:2026:i:c:s0304387825002445. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.