The Knowledge Economy and Political Destabilization in Autocracies

• In Event: Emerging Scholars in Political Economy

Abstract

An increasing number of authoritarian regimes are transitioning away from the industrial economy to the knowledge economy. However, while the knowledge economy can benefit autocracies by creating a more sustainable form of economic growth, it also requires an open data environment and the flow of information for its development, both of which are antithetical to authoritarian stability. Given this tension, how do autocracies manage knowledge-based organizations in a way that maximizes their economic benefits while minimizing their political risks? Why do authoritarian regimes accord more autonomy to some of these organizations but control others tightly? To answer these questions, I differentiate between organizations that facilitate information flow and those that regulate information flow. Furthermore, I argue that regimes control the former more heavily than the latter. Specifically, I contend that autocracies will endeavor to provide a conducive environment for the development of the knowledge economy more generally, but simultaneously create a layer of regulation that strategically targets organizations that pose higher political risks.
To illustrate my theory, I use Malaysia and Singapore as case studies and zero in on two foundational aspects of the knowledge economy – data-sharing and privacy protection. Moreover, I test my theory using evidence from interviews, archival data, and a novel dataset of knowledge-based organizations in both countries. These pieces of evidence demonstrate that the two regimes have indeed made efforts to provide a friendly regulatory environment, strong informational infrastructures, dense networks of research institutions, as well as programs to nurture human resources. In other words, these countries score highly on indicators of knowledge economy development. However, a closer look reveals that the Malaysian and Singaporean regimes have in fact bifurcated their data environment; organizations that facilitate information flow typically experience data access and usage processes that are restricted, opaque, and convoluted. In contrast, organizations that regulate information flow operate in a data environment that allows for open, transparent, and institutionalized processes of data access and usage. Similarly, both governments have also dichotomized their privacy protection regimes; while information flow facilitators are not protected by data privacy regulations, information flow regulators enjoy data privacy protections that are in line with international norms. Taken together, data-sharing is discouraged and privacy protection nonexistent for politically risky organizations but encouraged and strong, respectively, for economically beneficial organizations. The bifurcation of the data environment and privacy protection regimes in such autocracies thus results in an equilibrium where these autocracies are able to enjoy the economic rewards of the knowledge economy without suffering any political threats. My research has implications for the literature on preemptive repression and on the political economy of development.

Author

• Hui-Yuan Neo, Cornell University