The Royal Swedish Academy of Sciences announced on Monday that Daron Acemoglu, Simon Johnson, and James Robinson have been awarded the 2024 Nobel Prize in Economics \"for studies of how institutions are formed and affect prosperity.\"
Addressing one of the greatest challenges of our time—reducing the vast differences in income between countries—the laureates have demonstrated the pivotal role societal institutions play in economic development. \"The decisive difference is thus not geography or culture, but institutions,\" said Jakob Svensson, chair of the Committee for the Prize in Economic Sciences.
Illuminating Institutional Impact
Acemoglu, 57, a professor at the Massachusetts Institute of Technology (MIT), alongside his colleague Johnson, 61, also of MIT, and Robinson, 64, a professor at the University of Chicago, have devoted their research to understanding why some nations thrive while others lag behind.
Their work highlights how inclusive institutions that establish fundamental economic freedoms and the rule of law foster long-term growth. In contrast, extractive institutions that exploit the masses may provide short-term gains for those in power but are detrimental to sustained prosperity.
A Tale of Two Nogales
The laureates illustrated their findings with the example of Nogales, a city split by the US-Mexico border. Residents on the US side enjoy greater opportunities for education and political participation, resulting from inclusive economic and political institutions. Meanwhile, those on the Mexican side face limited prospects due to different institutional frameworks.
Championing Democracy
Speaking from Athens, Acemoglu expressed his delight upon receiving the award. \"The work that we had done favors democracy,\" he said. \"Countries that democratize, starting from a non-democratic regime, do ultimately grow about eight, nine years faster than non-democratic regimes. And it's a substantial gain.\"
He acknowledged the challenges inherent in introducing democracy, emphasizing that while it is not a panacea, its adoption can lead to significant economic benefits.
A Notable Nobel Year
The economics prize concludes this year's Nobel season, which celebrated achievements across various fields. Notably, South Korea's Han Kan won the literature prize—the only woman laureate this year—while the Peace Prize went to Japanese group Nihon Hidankyo for their commitment to fighting nuclear weapons. The physics and chemistry prizes recognized advancements in artificial intelligence, and the medicine prize honored discoveries in gene regulation.
The laureates will receive their awards, which include a diploma, a gold medal, and a $1 million reward, at ceremonies in Stockholm and Oslo on December 10, marking the death anniversary of Alfred Nobel.
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Acemoglu, Johnson and Robinson win 2024 Nobel economics prize
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