Nobel Prize in Economics 2024 to Acemoglu, Johnson and Robinson for explaining why some nations are rich and others poor

London
CNN
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Three economists were awarded the Nobel Prize on Monday for their research into how the nature of institutions explains why some countries become rich and others remain poor.

Daron Acemoglu, Simon Johnson and James Robinson will share the prize, worth 11 million Swedish kronor ($1 million).

The Nobel Committee praised the trio for explaining why “societies with poor rule of law and institutions that exploit the population do not produce growth or change for the better.”

“As Europeans colonized large parts of the world, the institutions in these societies changed,” the committee said, citing the economists’ work. While in many places this was aimed at exploiting the indigenous population, elsewhere it laid the foundation for inclusive political and economic systems.

“The laureates have shown that one explanation for the differences in wealth between countries is the social institutions introduced during colonization,” the committee added.

Countries that have developed “inclusive institutions” – which uphold the rule of law and property rights – have become wealthy over time, while countries that have developed “extractive institutions” – which, as the laureates put it, “squeeze” resources out of the broader population . that benefit elites – have experienced persistently low economic growth.

In their 2012 book “Why Nations Fail,” Acemoglu, a Turkish-American professor at the Massachusetts Institute of Technology (MIT), and Robinson, a British professor at the University of Chicago, argue that some nations are wealthier than other political nations because of their wealth and economic institutions.

The book begins with a comparison of living standards in two towns called Nogales – one in Arizona and one south of the border in the Sonora region of Mexico. While some economists argue that differences in climate, agriculture and culture have enormous effects on the prosperity of a place, Acemoglu and Robinson argue that this is true for the people of Nogales, Arizona healthier and wealthier due to the relative strength of their region Institutions.

Last year, Acemoglu and Johnson — a British-American professor at MIT — published “Power and Progress,” a study of how technological innovations over the past 1,000 years, from agricultural advances to artificial intelligence, have benefited elites rather than them Creating prosperity for all.

The authors warned: “The current path of AI is neither good for the economy nor for democracy.”

Asked whether their research simply argues that “democracy means economic growth,” Acemoglu replied, “The work we have done favors democracy,” but added that democracy is “not a panacea.”

“Our argument was that this type of authoritarian growth is more unstable and generally does not lead to very rapid and original innovations,” Acemoglu said in a telephone interview during the announcement ceremony.

In “Why Nations Fail,” he and Robinson argued that China was unable to sustain its economic growth due to a lack of inclusive institutions. More than a decade since the book's publication, Acemoglu said China has “challenged that argument a little bit” as Beijing has “invested” in the innovative areas of AI and electric vehicles.

“But my view is that these authoritarian regimes will generally have a harder time achieving long-term, sustainable innovation outcomes for a variety of reasons,” he said.

The economics prize is officially known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. In contrast to the prizes for physics, chemistry, medicine, literature and peace, it was established in 1968 not by the Swedish industrialist, but by the Swedish central bank.

Last year the prize went to Claudia Goldin, a professor at Harvard University, for her research on women in the labor market.

Using more than 200 years of U.S. data, Goldin showed how the nature of the gender pay gap has changed over time. Historically, much of the gap could be explained by differences in education and occupation. However, she noted that in recent history the biggest difference is between men and women in the same job and that it comes to the fore especially when a woman has her first child.

This story has been updated with additional information.