Nobel Prize goes to economists studying Europe’s colonial legacy
The long-lasting impact of Europe’s former empires on growth forms the basis of research by three U.S.-based academics who will share the 2024 Nobel Prize in economics.
Daron Acemoglu and Simon Johnson — a former chief economist at the International Monetary Fund — along with James A. Robinson, were praised for their analysis of how prosperity can come about, and the importance of institutions in that process.
Their work’s relevance to the present day, in discerning why some countries are rich and some much poorer, was highlighted by the Royal Swedish Academy of Sciences in Stockholm, whose award of $1.1 million will be shared between them.
“Reducing the vast differences in income between countries is one of our time’s greatest challenges,” Jakob Svensson, chair of the academy’s Committee for the Prize in Economic Sciences, said in a statement on Monday. “The laureates have demonstrated the importance of societal institutions for achieving this.”
In the panel’s description, research by the three academics showed how the path for prosperity can vary partly because of structures established in countries colonized by Europeans.
“In places where Europeans faced high mortality rates, they could not settle and were more likely to set up extractive institutions,” the economists wrote in a joint paper published in 2001. “These institutions persisted to the present.”
Of the three winners, Johnson is probably best known for his stint at the IMF. While brief — lasting only from March 2007 until August 2008 — it coincided with the onset of the global financial crisis.
He is a professor at the Massachusetts Institute of Technology along with his colleague Acemoglu. They co-authored a book published in 2023 called Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity.
“Broadly speaking the work that we have done favors democracy,” Acemoglu said via phone at the press conference after the prize was announced. “Countries that democratize starting from non-democratic regime do ultimately grow, in about 8-9 years, faster than non-democratic regimes, and it’s a substantial gain. But democracy is not a panacea. Introducing democracy is very hard.”
In an interview with Bloomberg published earlier this month, Acemoglu cast doubt on the chance that artificial intelligence will live up to its hype, predicting that “a lot of money is going to get wasted.”
Robinson, the third winner, is a professor at the University of Chicago. He and Acemoglu co-authored Why Nations Fail: The Origins of Power, Prosperity, and Poverty, a book first published in 2012.
The prize, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 by the Swedish central bank. It complements annual prizes for achievements in physics, chemistry, medicine, literature and peace, which were established in the will of Alfred Nobel — the Swedish inventor of dynamite who died in 1896.
Last year, Claudia Goldin received the accolade for her research into gender pay gaps, and the year before, former Federal Reserve Chairman Ben Bernanke shared the award with Douglas Diamond and Philip Dybvig for research on banks and financial crises.
Other laureates include Friedrich Hayek for work in the theory of money and economic fluctuations, William Nordhaus for integrating climate change into long-run macroeconomic analysis and Paul Krugman for his analysis of world trade.
The Nobel Prizes, awarded since 1901, are famously unequal, reflecting how women have been overshadowed by men in science for centuries. Only three women have received the economics award, which makes its roster of laureates the second most male-dominated, after the prize in physics.