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The 2024 Nobel Prize for economics has been awarded to academics Daron Acemoglu, Simon Johnson and James Robinson for their work on wealth disparities between nations.
Acemoglu and Johnson are professors at the Massachusetts Institute of Technology, while Robinson is a professor at the University of Chicago.
The trio’s work highlights that institutions set up during colonisation have had an enduring impact on economic outcomes in the countries affected.
Their research also indicates that more economically inclusive and politically democratic systems prove more conducive to technological innovation and long-run growth.
“This year’s laureates have pioneered new approaches, both empirical and theoretical, that have significantly advanced our understanding of global inequality,” said Nobel committee member Jakob Svensson.
“Reducing the huge differences in income between countries is one of our times’ greatest challenges,” he said, adding that while the laureates did not propose “simple recipes”, their work had a “huge societal impact”.
The committee’s breakthrough, in research published from 2001 onwards, was to establish a “clear chain of causality”, showing that institutions created to exploit the masses were bad for long-run growth, while those establishing economic freedoms and the rule of law aided it.
Colonisation, meanwhile, often brought about a sharp reversal in economic fortunes.
Places that were prosperous prior to colonisation, which were often more densely populated and in tropical climates, were more dangerous for European settlers. In these places, colonisers responded by setting up “extractive” systems protecting the interests of a small elite.
In poorer, less densely populated regions, often with more temperate weather, colonisers came in greater numbers and were more likely to introduce inclusive institutions that benefited the majority.
The Nobel committee said the laureates’ insights showed that democracies were “on average, in the long run . . . better for promoting growth”.
The committee emphasised that while all three worked at US universities, none was born in the US. Acemoglu was born in Turkey and his two colleagues in Britain.
Speaking from Athens, Greece, after the prize was announced, Acemoglu said the trio’s work could best be summarised as the study of the “natural experiment” created by colonialism.
This had “divided the world into very different institutional trajectories”, he said, with countries set on distinct paths depending on the resources European settlers had brought with them and the strategies they adopted.
“Broadly speaking, the work we have done favours democracy,” Acemoglu said.
He added that while China’s recent success in high-tech sectors was “a bit of a challenge” to their conclusions, “our argument has been that this sort of authoritarian growth is often more unstable”.
Acemoglu was born in Istanbul and studied in the UK, receiving his masters degree and doctorate from the London School of Economics after undergraduate studies in York.
The Turkish-American economist began his academic career at the LSE before moving to MIT. He won the John Bates Clark Medal, awarded to the most promising American economist under the age of 40 by the American Economic Association, in 2005.
Acemoglu worked with Robinson on the best-selling book Why Nations Fail.
Johnson was born in Sheffield but has spent his working life in the US. Before joining MIT, he worked at the Washington-based Peterson Institute think-tank and served as the IMF’s chief economist from 2007 to 2008.
He received his doctorate from MIT, after completing a masters at the University of Manchester following an undergraduate degree at Oxford university.
Robinson, who holds British and American citizenship, received degrees from the LSE and Warwick before completing a doctorate at Yale.
He has been at the University of Chicago since 2015 and previously worked at Harvard University.
Additional reporting by Claire Jones