Nobel Prize in Economics 2024 Awarded to Acemoglu, Johnson, and Robinson for Work on Institutions and Prosperity

 On the 14th of October, 2024 Daron Acemoglu, Simon Johnson, and James Robinson received the Nobel Prize in Economics once again for their work on how institutions determine economic development and variations in wealth. The classic, Why Nations Fail, co-authored by Collier with three of his colleagues, has revolutionized the scholarship on economics and introduced a fresh view on the dynamics of institutions and politics at the national level and their impact on success and failure.

Their works were appreciated by the Nobel Committee for their contribution to the change of the paradigm in the development of nations. Acemoglu, Johnson, and Robinson’s empirical work examine how inclusive institutions—those that grant people political power, promote innovation, and generate income to share—promote economic development. On the other hand, extractive institutions are institutions that confer decision-making power to a selected few and these give average or worse outcomes.

Daron Acemoglu from MIT has focused his efforts on the relationship between technology and labor and income distribution Simon Johnson, former IMF Chief Economist, is involved with present-day crisis and recovery policies. James Robinson has recently moved to the University of Chicago and has maintained his interest in political economy, institutions, governance, and democratic processes.

The three have done the academia important work of explaining the roles of governance in determining the fate of nations and this year’s Nobel reminds us that their discoveries are as timely as today’s global concerns such as inequity, economic shocks, and disruptions caused by technologies among others.