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Ai-Tocracy

Author

Listed:
  • Martin Beraja
  • Andrew Kao
  • David Y Yang
  • Noam Yuchtman

Abstract

Recent scholarship has suggested that artificial intelligence (AI) technology and autocratic regimes may be mutually reinforcing. We test for 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 contracts, as well as on social unrest across China since the early 2010s. We first show that autocrats benefit from AI: local unrest leads to greater government procurement of facial-recognition AI as a new technology of political control, and increased AI procurement indeed suppresses subsequent unrest. We show that AI innovation benefits from autocrats’ suppression of unrest: the contracted AI firms innovate more both for the government and commercial markets and are more likely to export their products; noncontracted AI firms do not experience detectable negative spillovers. 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, 2023. "Ai-Tocracy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(3), pages 1349-1402.
    • Handle: RePEc:oup:qjecon:v:138:y:2023:i:3:p:1349-1402.
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    More about this item

    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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