MIP Policy Studio, Room 10M
Encina Hall, Stanford University
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 contracts, 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.
Exporting the Surveillance State via Trade in AI
What are the international ramifications of China’s emergent leadership in facial recog- nition AI? We collect global data on facial recognition AI trade deals and document two facts. First, we show that China has a comparative advantage in this technology. It exports substantially more facial recognition AI than other countries, and particularly so as compared to other frontier technologies. This comparative advantage may stem in part from the Chinese government’s larger demand for the technology for do- mestic surveillance and political control — a form of “home-market” effect — as well as Chinese firms’ access to large government datasets. Second, we find that there is a political bias in China’s facial recognition AI exports. It is more likely to export this technology to autocracies and weak democracies relative to other frontier technologies, in particular to those lacking domestic AI innovation or experiencing political unrest. No such bias is observed for the United States. To the extent that China may be exporting its surveillance state via trade in AI, this can enhance and beget more autocracies abroad. Policymakers should thus frame AI trade regulations around regulations on products with global externalities.
David Y. Yang is an Associate Professor in the Department of Economics at Harvard University, a Faculty Research Fellow at NBER and a Global Scholar at CIFAR. David’s 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.
This event will be held in-person at Stanford University, however, the lecture will be recorded. If you are interested in viewing the recording, please contact Debbie Aube.
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