Technology adoption in autocratic economies: The role of fiscal capacity

Thorsten Janus

Scottish Journal of Political Economy, 2023, vol. 70, issue 4, 355-371

Abstract: What determines technology in autocratic regimes? In this paper, I assume that a rent‐extracting regime can adopt technology from the global technology frontier, tax‐paying citizens can oust the regime, and technology can decrease the ousting cost. I show that a lack of fiscal capacity can increase technology by preventing the ousting constraint from binding. Consistent with this prediction, tax collections and total factor productivity are negatively related in autocratic regimes. Extensions show that natural resources can divorce fiscal revenues from technology, which can encourage technology blocking. However, if technology adoption is socially costly, autocratic regimes can adopt too much technology.

Date: 2023
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