Scaling, Lock-In, and Proxy Compliance: A Political Economy of Responsible AI
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Abstract (arXiv)
AI accountability at scale is an institutional problem: who can observe, verify, and change deployed systems. We develop a sequential political-economy model in which an AI vendor chooses auditability and substantive mitigation, a deployer monitors after adoption while facing switching costs, and enforcement depends on verifiable evidence. Anticipating the deployer's monitoring response, the vendor may stop at an observable procurement floor while mitigating below the social first best, producing a proxy-compliance equilibrium. We characterize the unique interior equilibrium and the corner in which harm is fully mitigated. Independent audit rights raise enforcement exposure directly; portability restores deployer leverage; incident reporting adds a regulator-visible evidence channel; and outcome-linked liability creates incentives that do not depend on vendor-controlled detection. The results explain why documentation and standardized evaluations can coexist with persistent post-deployment harms, and generate testable implications for monitoring, mitigation, and the gap between formal compliance and operational outcomes.
Key facts. No citing papers in the map yet (data through 7 Oct 2026). Builds on 16 of its 53 references that are in the map. First posted on arXiv 30 Jul 2026.
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References · 16
- 2018Model Cards for Model Reportingcited by 1,068
- 2020Closing the AI Accountability Gap: Defining an End-to-End Framework for Internal Algorithmic Auditingcited by 380
- 2021The Values Encoded in Machine Learning Researchcited by 172
- 2023Auditing large language models: a three-layered approachcited by 135
- 2019The Ethics of AI Ethics -- An Evaluation of Guidelinescited by 129
- 2021Demystifying the Draft EU Artificial Intelligence Actcited by 82
- 2020Why Fairness Cannot Be Automated: Bridging the Gap Between EU Non-Discrimination Law and AIcited by 81
- 2022Outsider Oversight: Designing a Third Party Audit Ecosystem for AI Governancecited by 67
- 2023Who Audits the Auditors? Recommendations from a field scan of the algorithmic auditing ecosystemcited by 49
- 2021Conformity Assessments and Post-market Monitoring: A Guide to the Role of Auditing in the Proposed European AI Regulationcited by 19
- 2022Risk management in the Artificial Intelligence Actcited by 16
- 2024Addressing the regulatory gap: moving towards an EU AI audit ecosystem beyond the AI Act by including civil societycited by 7
4 more
- 2024The Fundamental Rights Impact Assessment (FRIA) in the AI Act: Roots, legal obligations and key elements for a model templatecited by 7
- 2025The Accountability Paradox: How Platform API Restrictions Undermine AI Transparency Mandatescited by 7
- 2023Frontier AI developers need an internal audit functioncited by 4
- 2025Do AI Companies Make Good on Voluntary Commitments to the White House?cited by 2
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