Daron Acemoglu, Simon Johnson and James Robinson have received the Nobel Memorial Prize in Economic Sciences for 2024, according to an Oct. 14 news release from the Royal Swedish Academy of Sciences.
Acemoglu and Johnson, both professors at the Massachusetts Institute of Technology, Cambridge, and Robinson, a professor at the University of Chicago, were awarded the prize for their “studies of how institutions are formed and affect prosperity,” the news release said.
“Reducing the vast differences in income between countries is one of our time’s greatest challenges," said Jakob Svensson, chair of the economics prize committee, in the news release. "The laureates have demonstrated the importance of societal institutions for achieving this.”
The three Nobel Prize laureates showed in their research that when European colonizers introduced and developed inclusive institutions, they created long-term benefits for all, while those that extracted resources for their own short-term benefits failed to generate long-term economic growth, said Bruce Jacobs, principal, co-founder, co-chief investment officer, portfolio manager and co-director of research at Jacobs Levy Equity Management.
“When focused on the extraction of resources, colonizers created inefficient economic and social institutions that persisted due to a ‘commitment problem’ — a belief that promises of political reform could not be trusted,” Jacobs said. “Whether a population was able to mobilize and become a threat determined whether it became trapped or was able to transition to more equitable institutions.”
Jacobs said the model the laureates developed identified conditions in which authoritative regimes are created and where reform is likely to occur through their developed model showing the pivotal role played by political and economic conditions introduced by colonizers.
“Their research reinforces the conclusion that emphasizing democracy and inclusive institutions goes hand-in-hand with the goals of fighting poverty and promoting economic development,” Jacobs said. “China’s strong investment in generative artificial intelligence and electric vehicles has tested that theory, but the argument remains that authoritarian nations will struggle to produce sustainable innovation.”
