North News
New Delhi, October 14
The 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson for their pioneering research on how societal institutions shape prosperity, the Royal Swedish Academy of Sciences announced.
The laureates’ work highlights the critical role institutions play in determining a country’s economic success. They have shown that societies with weak rule of law and exploitative institutions fail to foster long-term growth, while inclusive institutions can drive prosperity. Their research explains why countries with inclusive systems, even those colonized under poor conditions, often prosper over time, while those with extractive institutions stagnate.
The scholars also explored how colonialism impacted institutional development. In some cases, European colonizers set up extractive institutions to exploit local populations, leading to enduring poverty. In others, inclusive institutions were established, benefiting future generations. The scholars research further reveals how the political systems in many countries remain trapped in low-growth cycles due to short-term gains for elites under extractive institutions. By contrast, inclusive institutions promote broad-based growth and stability. This body of work offers insights into why democratization may occur, particularly when the ruling elite faces revolutionary threats.
“Reducing income disparities between countries is one of the greatest challenges of our time. The laureates’ work underscores the importance of societal institutions in addressing this issue,” said Jakob Svensson, Chair of the Nobel Committee for Economic Sciences.
