Where Does Technology Innovate Best?

A brief argumentative analysis on the ability of states' governments, specifically democratic vs. autocratic, to foster technological growth.

Technological Innovation - The Only Source

Throughout human history, the only proven feasible source of continuous economic growth is technological development. Therefore, the question is, how can societies stimulate advancements in tech? The answer lies in a system of inclusive institutions which must successfully interact to foster efficiency. A government’s ability to create technological development, and therefore stimulate the economy, is dependent upon the type of institutions which serve to legitimize governmental policies. Governance structures typically fall into two distinct types – autocracies and democracies. Both systems, historically and in the modern age, are responsible for technological advancement and stagnation. While autocratic governments can experience technologic and economic collapse, typically through chaotic power shifts, autocracy is not fundamentally at odds with technological innovation. In addition, democracies do not necessarily guarantee technologic development. For both government systems, a country’s ability to create improved technologies depends upon the effectiveness of its institutions, and selective capacity for choosing new political leaders.

Technological progression is the key to unlocking continuous strong economic performance and can be observed in autocratic states - most notably China. An autocracy is a governance system in which one person or group has complete legislative and administrative authority over the state. In China, this position is held by President Xi Jinping, and the 25 members who comprise the Chinese politburo. This group oversees control of the Chinese Communist Party, the only political party in China. The first two decades of Chinese Communist Party rule (1949-1979), saw incredibly slow, if not negative, growth in GDP per capita and technological development. Famine and ineffective economic policies advocated by Chairman Mao, who experienced no political checks, led to mass poverty. The importance of technological development was not yet learned by China’s ruling party - but why is technology so essential to creating economic growth? As researcher Bingqin Li explains in the academic article, Technological Innovation and Social Development in Asia, “economic growth is in part due to increased capital investment and in part to population growth; but the main driver has been technological progress – getting more output from the same quantity of capital and labor or getting the same output from less quantity and labor.” Technology makes capital or labor more efficient therefore, more goods are produced while output decreases or remains the same. This process creates economic growth, and if an authoritarian government’s institutions hold the ruling class accountable – these governance systems can experience technological innovation.

Institutions, in both democratic and autocratic states, demonstrate their effectiveness by removing unfit leaders through various ‘selectorate’ processes. In democracies, this process is carried out via the public vote. However, in autocracies, the selectorate process can take many different forms. Provided the elites maintain political power upon removing or replacing an autocratic leader, a state may continue to pursue advances in technological and economic development. This continuation occurs because the state will not delve into political instability. Authors Besley and Kudamatsu discuss the selectorate in comparison with democracies in their research paper, Making Autocracy Work, “As long as the selectorate has a strong hold over power, autocracy is a better form of government if the distributional issue is neither too salient nor to irrelevant.” In China, the selectorate is the politburo. Throughout China’s history, the politburo has never experienced a chaotic transfer of presidential power, which explains why China has experienced such tremendous technological and economic growth since Mao’s death. This, however, does not suggest all autocracies experience effective selectorate processes and technological innovation. Many autocratic states fail in their ability to peacefully transfer political power, and therefore do not experience technological innovation. In addition, an orderly transfer of political authority is not the only requirement for creating technological innovation.

Democracies, which observe a higher probability of peaceful power transitions relative to autocracies, still do not automatically guarantee technological innovation. Many democracies lack the necessity of effective inclusive political and economic institutions. As Daron Acemoglu and James Robinson discuss in the book Why Nations Fail, inclusive institutions are broadly defined as, “those that allow and encourage participation by the great mass of people in economic activities that make best use of their talents and skills and that enable individuals to make the choices they wish.” Politically, these institutions are centralized through a federal government which provides broad based political power (i.e. elections) to the general population. Society holds those in power accountable, which is why democracies, typically, observe peaceful transitions of power. Economically, inclusive institutions encourage broad based economic participation by incentivizing individuals to pursue their self-chosen vocations. Inclusive institutions are in stark contrast with exclusive institutions. Designed to forcefully transfer wealth from certain social groups to others through extractive practices, exclusive institutions limit economic participation and maintain political power in select hierarchies. In order for inclusive institutions to avoid becoming exclusive, certain social goods must be granted by the government to all members of society. These include, secure private property rights, unbiased legal systems, a provision of public services and the legal admittance of new businesses to the economy. Democratic states which act efficiently in their legal bureaucratic system provide these necessary provisions and encourage technological development – however, some democracies fail.

Brazil is a democratic republic which, over the past two decades, has stalled technologically and economically. The global pandemic is not only to blame - Brazil has rampant political corruption, large levels of violence and experienced a general breakdown of inclusive institutions. In 2017, Brazil reported over sixty murders of farmworkers engaged in land ownership conflicts. These crime statistics are emblematic of greater social issues in Brazilian society. In an overview by the World Bank, a report on the overall economic outlook of Brazil states, “Brazil has suffered low productivity growth over the last two decades due to, among other factors, a cumbersome business environment, distortionary tax system, inadequate business support and a domestic market relatively closed to trade and external competition.” Brazil, as a democratic society, has inclusive institutions. Unfortunately, these institutions do not successfully interact with the people they serve, nor the governmental system to which they belong. As a result, corrupt practices are widespread throughout Brazil’s institutions which therefore delegitimize government policies. Institutional inefficiency leads to a lack economic and technological growth.

A counter to these arguments is the ability of a state to develop technological innovation is contingent upon the state’s historical background. Many states which are unable to advance their economy by improving technological output suffered brutally under colonialist rule. Many of these nations are observed in western Africa where the slave trade decimated the populations and societies. Many nations responsible for these colonial practices are currently developed Western countries. This is a valid argument and would force the argument to amend. Technological development, contingent on a region’s historical background in relation to extractive economic systems, is heavily dependent upon the effectiveness of its institutions, and selective capacity for choosing new political leaders.

Works Cited

Besley, Timothy, and Masayuki Kudamatsu. "Making Autocracy Work." Economic Organization and Public Policy Program May 2007 Accessed 19 Nov. 2020.

"Brazil Overview." The World Bank, 18 Nov. 2020.

Li, Bingqin. "Technological Innovation and Social Development in Asia." Journal of Asian Public Policy, 23 Nov. 2018 Accessed 19 Nov. 2020.

Tech Development in Autocratic and Democ
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