AI-tocracy: The Political Economy of AI, with David Yang

Harvard Fairbank Center for Chinese Studies

Speaker: David Yang, Assistant Professor Economics, Harvard University The conventional wisdom suggests a misalignment between autocracy and technological innovation. In this project, we examine whether there exists a political and economic alignment between the monitoring aims of autocracies and the innovative aims of AI firms. We gather comprehensive data on firms and government procurement contracts in China’s facial recognition AI industry. We find two results. First, autocrats benefit from AI: local unrest leads to greater government demands for public security AI, and increased AI investment suppresses subsequent unrest. Second, AI sector benefits from the autocrats: the contracted AI firms innovate more both for the government and commercial markets. Taken together, these results indicate a stable equilibrium between the autocrats and the AI sector. Using a directed technical change model, we show that autocrats’ demand for AI not only could enhance its stability, but may also sustain growth and bias innovation towards data-intensive sector when economies of scope from government data are sufficiently large. David Yang is an Assistant Professor of Economics. His research focuses on political economy, behavioral and experimental economics, economic history, and cultural economics. In particular, David studies the forces of stability and forces of changes in authoritarian regimes, drawing lessons from historical and contemporary China. David received a B.A. in Statistics and B.S. in Business Administration from University of California at Berkeley, and PhD in Economics from Stanford.