When a country announces a National AI Strategy, its economy actually slows down for years.
We assume that a formal government plan for AI is an immediate green light for growth and innovation. In reality, countries that adopt these strategies see a decrease in GDP per capita growth of up to 1.0 percentage point for the following 3-4 years. This is the 'J-curve' in action: the initial costs of restructuring, regulation, and investment create a significant drag before any benefits kick in. It’s a warning that 'digital transformation' is an expensive, messy process that looks like a failure on paper before it ever looks like a success. For the average person, it means that big government tech promises might actually make things tighter in the short term.
National AI Strategies and Macroeconomic Performance A Staggered Difference-in-Differences Approach
SSRN · 6580199
Governments worldwide have responded to the rise of artificial intelligence by publishing National AI Strategies (NAS), comprehensive policy documents that allocate public R&D funding, establish AI education programs, create governance frameworks, and signal long-term commitment to AI-driven transformation. This paper provides the first cross-country causal evaluation of these policy responses on macroeconomic outcomes. Exploiting the staggered adoption of NAS across 44 countries between 2017 an