The 2024 Nobel Prize in Economics Goes to Acemoglu, Johnson, and Robinson
X/ @BradPorcellato
October 14, 2024 Hour: 7:29 am
They explained that differences in prosperity between countries were due to social institutions introduced during colonization.
On Monday, the Royal Swedish Academy of Sciences announced that Daron Acemoglu, Simon Johnson, and James Robinson were awarded the 2024 Nobel Prize in Economic Sciences for their studies on how institutions are formed and how they affect prosperity.
RELATED:
2024 Nobel Peace Prize Goes to Japanese Anti-Nuclear War Organization
“Reducing the enormous income disparities between countries is one of the greatest challenges of our time. The laureates have demonstrated the importance of social institutions in achieving this,” stated Jakob Svensson, chairman of the Economic Sciences Prize Committee.
The three awardees have shown the importance of social institutions for a nation’s prosperity, and that societies with a weak rule of law and institutions prone to exploiting the population do not generate growth or lead to improvements. They have also shown that one of the explanations for the differences in prosperity among countries lies in the social institutions introduced during colonization.
The creation of inclusive institutions has generated wealth, while extractive institutions, though they provide short-term gains for those in power, do not improve the overall situation of the population. However, they also demonstrate that change is possible and that new institutions can be formed.
In some circumstances, a country can break free from its inherited institutions to establish democracy and the rule of law. In the long term, these changes also lead to a reduction in poverty. Based on an analysis of the situation in the city of Nogales, located on the U.S.-Mexico border, the three economists show that the decisive factor is not geography or culture but institutions.
“The people living north of the border fence are part of the U.S. economic system, which gives them greater opportunities to choose their education and profession. They are also part of the U.S. political system, which grants them extensive political rights. South of the fence, residents are not so fortunate. They live under different economic conditions, and the political system limits their ability to influence legislation,” the Committee said.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, as the award is officially called, is the only Nobel Prize not established in his will.
teleSUR/ JF Source: EFE