John AdoyiThree distinguished economists—Daron Acemoglu and Simon Johnson of the Massachusetts Institute of Technology (MIT), United States of America and James Robinson of the University of Chicago—have been awarded the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their “studies of how institutions are formed and affect prosperity.”
The Royal Swedish Academy of Sciences announced the honour, highlighting their transformative work that explores the pivotal role of institutions in determining a nation’s prosperity or stagnation.
The Nobel committee emphasised the importance of their research in addressing a central economic question: why do some countries flourish while others remain trapped in poverty?
Acemoglu, Johnson, and Robinson’s work demonstrates how institutions, such as governance structures, the rule of law, and political stability, shape a country’s economic growth. Their research sheds light on the profound changes in institutions during European colonization, noting that the impact of colonialism was not uniform across the globe. Some societies experienced extractive institutions aimed at exploiting the indigenous population and resources, while others saw the development of inclusive institutions that fostered economic growth.
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The laureates are best known for their collaborative work, especially their 2012 book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty.” The book argues that inclusive institutions, which offer broad access to economic opportunities and check political power, are key to fostering sustainable growth. Conversely, extractive institutions, where power and wealth are concentrated in the hands of a few, lead to economic stagnation and inequality. The Nobel committee praised their work for explaining how societies with weak institutions and poor rule of law struggle to generate economic growth.
Jakob Svensson, chair of the Nobel committee, remarked that “Reducing the vast differences in income between countries is one of our time’s greatest challenges.”
“The laureates have demonstrated the importance of societal institutions for achieving this,” Svensson added.
Daron Acemoglu and Simon Johnson, both professors at MIT, are celebrated for their contributions to economic theory and development. Acemoglu, one of the most-cited economists of his generation, has made significant contributions to labor economics, political economy, and technological change. Simon Johnson, a former chief economist at the International Monetary Fund, is recognized for his focus on economic crises and institutional reform.
James A. Robinson, a political scientist and economist at the University of Chicago, has dedicated much of his career to studying the political economy of development. His work has profoundly impacted the understanding of democracy, authoritarianism, and state-building in developing nations.
Reacting to the news, Acemoglu expressed his surprise, saying, “You never expect something like this. I am delighted. It’s just a real shock and amazing news.” He also noted that their work broadly supports democratic institutions.
The Sveriges Riksbank Prize in Economic Sciences, often referred to as the Nobel Prize in Economics, was established in 1968 by Sweden’s central bank, unlike the original five prizes outlined by Alfred Nobel. The 2024 prize concludes the Nobel week, which began with the Nobel Prize in Physiology or Medicine. The laureates will split the 11 million Swedish kroner (approximately $1 million) prize and will receive their gold medals and diplomas on December 10, 2024.
The trio joins a distinguished list of previous winners, including last year’s laureate, Claudia Goldin, who was recognized for advancing the understanding of women’s labor market outcomes.
