I am writing a soft science fiction set hundreds of years into the future, with Terrans ruling the known universe, establishing a number of vast interstellar empires, science and technology advancing in a steady pace any science fiction fan could imagine, and conflicts between political entities sporadic but recurring.
However, only Earth's technology advancement is regulated at early-to-mid 21st century level by a union of governing bodies. This could have been done for a number of reasons. For instance, Earth could have been declared a demilitarized zone via treaties between nations, which is not to be violated even during wartime, as a sign of good faith. Earth would have a heavily guarded spaceport that connect it to the interstellar network, but other part of it must be kept behind in technology level.
For all practical purposes, any devices or objects that are technologically futuristic to a early-to-mid 21st century level, or can be used in such a way that they will be the determining factor in technology advancement are outlawed. For example, possession of assault laser rifles are prohibited on Earth because they are too advanced in technology, as are building assault laser rifle manufacturing lines, even if the process can be replicated using contemporary 21st century technologies. This can be thought as in parallel to how meth labs are illegal but beakers and the ingredients are not in real life.
Some immediate consequences one can imagine is that travelling to and from Earth might not be heavily restricted - for it might as well be a popular destination of sightseeing tours - but personal belongings of the tourists are inspected for violations. Exports to Earth are consequently heavily monitored at the customs, though not so much for commodity imports from it (except for luxuries), because any factory on Earth can't possibly match the state of the art material productivity or efficiency.
My questions are:
Economic concerns. What form will Earth's economy takes shape? Will a free market approach work? Should it at least have some kind of trade protection in addition to the custom inspections, as even technologically adequate products might have been manufactured with much more efficient future technologies. Can someone exploit the price difference between Earth and other part of the universe without violating the technology regulation law? Does Earth use the same interstellar currency? Are fund transferring between Earth and the rest of the known universe allowed?
Enforcement concerns. How does the local Earth government combat "technology smuggling" effectively? Should the police force or other peace-keeping forces on Earth be exempt from the technology regulation? If so, wouldn't corruption within the authority exacerbate the situation?
Intellectual technology advances. Intangible technology advances, like new computer algorithms, can be smuggled to Earth without detection. Even with possible "brain scanner"s at the custom checkpoints, a malicious party can easily beam information from outer space to Earth via directed electromagnetic radiation. Besides, can you really draw a line and say what algorithms are banned and what are not? If someone uses a more efficient scheduling algorithm developed in the 22nd century in their business on Earth, would that really be the end of world? Should "algorithm" and "implementation of algorithm" be distinguished? What about intelligent AI systems? Hell, if someone proves
P=NP, then a majority of 20th and 21st century encryption algorithms could potentially become obsolete.
What are some of the other ramifications of regulating technology advancement locally you can think of, and how may it be explained in-setting?
Last but most importantly, is this setting realistic and probable? Are there any unintended consequences that have slipped my mind that might become a plot hole in my story later?