Rethinking Social and Economic Policy in the Age of General-Purpose Artificial Intelligence

Navigating the Cascading Impacts of AI Adoption

Jonathan W. Welburn, Maya Buenaventura, Vegard M. Nygaard, Chandra Garber, Leah Dion, Pedro Nascimento de Lima, Anton Shenk, Anujin Nergui, Carter C. Price, Benjamin Boudreaux, et al.

ResearchPublished Sep 23, 2025

The United States faces a new wave of systemic challenges, including artificial intelligence (AI), declining economic mobility, shifts in U.S. competitiveness, declining population growth, and a potentially unsustainable fiscal outlook. These challenges have prompted a need to rethink social and economic policy systems, approaches to policy, and the need for a new national strategy.

The authors synthesize findings related to the challenge of AI and examine sectoral trends in AI adoption, focusing on four key sectors (financial services, health care, climate and energy services, and transportation) while highlighting the profound uncertainty that surrounds the future trajectory of AI capability advancements. They examine the inherent trade-offs and tensions of AI adoption through both legal and macroeconomic lenses and discuss considerations for adequate policy responses. They also employ insight from systems mapping to evaluate potential trade-offs.

Recommendations

  • Policymakers and stakeholders should explore possible disruptions using adaptable scenarios. Developing plausible scenarios for AI adoption that consider emerging AI capabilities and implementation trends can help policymakers consider disruptions in detail and assess a wide variety of both positive and negative outcomes that are associated with different policy options.
  • Policymakers and stakeholders should promote interagency coordination. Given the complexity and unpredictability of AI's effects, a coherent policy response requires input and expertise from multiple sectors, including technology, health, education, and public safety. By fostering interagency coordination, stakeholders can ensure that different perspectives are integrated into policy formulation and implementation.
  • Policymakers and stakeholders should ensure transparency and oversight. Establishing transparency requirements for AI systems is essential for enhancing accountability and building public trust. Clear understanding of how AI technologies are trained, are tested, and operate can demystify these systems.
  • Policymakers and stakeholders should promote democratic deliberation and public engagement. Creating mechanisms for meaningful public participation in AI governance allows for a more democratic approach to governance and is vital to ensure citizens’ values and concerns shape technology integration.
  • Policymakers and stakeholders should invest in research. To develop effective policies, policymakers and other stakeholders should fund research that examines existing measures of social and economic well-being.
  • Policymakers and stakeholders should mitigate systemic risks. The unpredictability of AI’s effects on various sectors can lead to cascading failures, systemic risks, and potential large-scale workforce impacts. One approach to managing unpredictable and systemic risks is using automatic stabilizers that kick in to mitigate downside risks.

This is part of the Social and Economic Policy Rethink Initiative, a RAND effort to transform the approach to solving social and economic policy problems.

Topics

Document Details

Citation

Chicago Manual of Style

Welburn, Jonathan W., Maya Buenaventura, Vegard M. Nygaard, Chandra Garber, Leah Dion, Pedro Nascimento de Lima, Anton Shenk, Anujin Nergui, Carter C. Price, Benjamin Boudreaux, Beba Cibralic, Jim Mignano, Sean Mann, Flannery C. Dolan, and Karishma V. Patel, Rethinking Social and Economic Policy in the Age of General-Purpose Artificial Intelligence: Navigating the Cascading Impacts of AI Adoption. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA3888-2.html.
BibTeX RIS

Funding for this research was provided by contributions from the RAND Social and Economic Policy Advisory Board; generous gifts by Frank M. Clark, Michael J. Critelli, William A. Downe, Jihee Kim Huh and Peter Yun Huh, and the Donald M. James Family Foundation. This research was conducted by RAND Social and Economic Well-Being.

This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.