Artificial Intelligence, Globalization, and Strategies for Economic Development
Progress in artificial intelligence and related forms of automation technologies threatens to reverse the gains that developing countries and emerging markets have experienced from integrating into the world economy over the past half century, aggravating poverty and inequality. The new technologies have the tendency to be labor-saving, resource-saving, and to give rise to winner-takes-all dynamics that advantage developed countries. We analyze the economic forces behind these developments and describe economic policies that would mitigate the adverse effects on developing and emerging economies while leveraging the potential gains from technological advances. We also describe reforms to our global system of economic governance that would share the benefits of AI more widely with developing countries.
We thank Avital Balwit, Katya Klinova, Rafael Proença, Martin Schindler, Don Suh and participants at the 2020 IMF/INET Conference on Macroeconomics in the Age of AI for insightful comments and suggestions. Financial support from the Institute for New Economic Thinking is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.