I think it makes the game more difficult. Techs are great bribing tools.
What it does to the game is magnify things. If it's hard to keep up (deity) you now can no longer use the single greatest catch-up tool (trading a single unique tech to many AI's), nor can use the diplomacy wedge of bribing AI's, and so the game is harder. If it's easy to keep up (noble or below) the game is made even easier as now the ai can't even abuse a love-fest to keep up with you.
It also makes espionage economy much more attractive, which is kind of tangential on what it does to difficulty.