Daron Acemoglu, Simon Johnson, and James Robinson have been awarded the 2024 Nobel Prize in Economics for their groundbreaking research on how societal institutions influence economic prosperity. The Royal Swedish Academy of Sciences announced the winners on Monday, highlighting their significant contributions to understanding the critical role institutions play in shaping nations’ wealth and development.
“Reducing the vast differences in income between countries is one of our time’s greatest challenges,” said Jakob Svensson, chair of the Committee for the Prize in Economic Sciences. “The laureates have demonstrated the importance of societal institutions for achieving this.”
Acemoglu, 57, and Johnson, 61, both professors at the Massachusetts Institute of Technology (MIT), along with Robinson, 64, a professor at the University of Chicago, have collaborated extensively on exploring the impact of political and economic institutions on global disparities in wealth.
Their research offers insights into why some countries flourish while others struggle, emphasizing that the nature of institutions—whether inclusive or extractive—plays a pivotal role. The laureates illustrated this through examples like the city of Nogales, split by the US-Mexican border, where stark differences in prosperity exist despite shared geography and culture.
“The decisive difference is thus not geography or culture, but institutions,” noted the Royal Swedish Academy of Sciences. Residents north of the border benefit from economic opportunities and political rights within the US system, while those to the south face limitations in both economic conditions and political influence.
The laureates have also shed light on why some nations become trapped in cycles of low economic growth. They point out that while inclusive institutions foster long-term benefits for society, extractive institutions may offer short-term gains for those in power but ultimately hinder sustainable development.
“Institutions that were created to exploit the masses are bad for long-run growth,” the Academy stated. “Ones that establish fundamental economic freedoms and the rule of law are good for it.”
Speaking from Athens upon receiving the news, Acemoglu expressed his delight and emphasized the positive impact of democracy on economic growth. “Countries that democratize, starting from a non-democratic regime, ultimately grow faster than non-democratic regimes,” he said. “It’s a substantial gain.”
While acknowledging that democracy is not a panacea and that introducing democratic systems can be challenging, Acemoglu highlighted the importance of institutions that empower citizens and promote inclusive economic practices.
The Nobel Prize in Economics, officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 and is awarded by the Royal Swedish Academy of Sciences. The prize recognizes outstanding contributions to the field of economics and is presented alongside the original Nobel Prizes established by Alfred Nobel.
This year’s Nobel Prizes have celebrated advancements across various fields, including artificial intelligence in physics and chemistry, efforts against nuclear weapons for the Peace Prize, and contributions to literature and medicine.
The laureates will receive their awards at a ceremony in Stockholm on December 10, the anniversary of Alfred Nobel’s death. Each Nobel Prize consists of a diploma, a gold medal, and a monetary award of $1 million.
— With input from AFP
Reference(s):
Acemoglu, Johnson and Robinson win 2024 Nobel economics prize
cgtn.com
