'Nobel economics prize' awarded to trio for work on links between institutions and prosperity
Daron Acemoglu, Simon Johnson and James A. Robinson won the 2024 Nobel memorial prize in economics "for studies of how institutions are formed and affect prosperity", the Royal Swedish Academy of Sciences said on Monday.
Issued on: 14/10/2024
Daron Acemoglu, Simon Johnson and James A. Robinson.
© Niklas Elmehed, Nobel Prize Outreach
The Nobel memorial prize in economics has been awarded to Daron Acemoglu, Simon Johnson and James A. Robinson for research into differences in prosperity between nations.
The three economists “have demonstrated the importance of societal institutions for a country’s prosperity,” the Nobel committee of the Royal Swedish Academy of Sciences said.
“Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better. The laureates’ research helps us understand why,” it added.
The announcement was made Monday in Stockholm.
Acemoglu and Johnson work at the Massachusetts Institute of Technology and Robinson conducts his research at the University of Chicago.
The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.
Though Nobel purists stress that the economics prize is technically not a Nobel Prize, it is always presented together with the others on Dec. 10, the anniversary of Nobel's death in 1896.
Nobel honors were announced last week in medicine, physics, chemistry, literature and peace.
(AP)
The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.
Though Nobel purists stress that the economics prize is technically not a Nobel Prize, it is always presented together with the others on Dec. 10, the anniversary of Nobel's death in 1896.
Nobel honors were announced last week in medicine, physics, chemistry, literature and peace.
(AP)
Trio wins economics Nobel for work on wealth inequality
Stockholm (AFP) – The Nobel prize in economics was awarded on Monday to Turkish-American Daron Acemoglu and British-Americans Simon Johnson and James Robinson for research into wealth inequality between nations.
Issued on: 14/10/2024 -
'Inclusive institutions'
In a statement explaining the prize, the jury noted the example of the city of Nogales, which is divided by the US-Mexican border, where residents on the US side of the city tend to be better off.
"The decisive difference is thus not geography or culture, but institutions," the Royal Swedish Academy of Sciences said.
The US economic system provides residents north of the border greater opportunities to choose their education and profession, and they are part of the US political system, which gives them broad political rights.
By contrast, south of the border, residents live under other economic conditions, and the political system limits their potential to influence legislation.
In addition, the jury noted that the laureates' research also helped explain why some countries become trapped in a situation of "low economic growth."
The Academy said differences between nations could be traced back to the institutions built up by colonial powers.
It said that "in some colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonisers," which would provide only "short-term gains for the people in power".
In others, colonial powers "built inclusive political and economic systems," which would "create long-term benefits for everyone."
So "institutions that were created to exploit the masses are bad for long-run growth."
Conversely, "ones that establish fundamental economic freedoms and the rule of law are good for it."
Acemoglu, who was "delighted" to receive the award, told reporters that the "work that we had done favours democracy."
'Substantial gain'
Speaking via telephone from Athens as the award was announced in Stockholm, Acemoglu said that the economies of "countries that democratise, starting from a non-democratic regime" grow faster than non-democratic regimes.
"And it's a substantial gain," Acemoglu said.
He acknowledged nonetheless that "democracy is not a panacea" and "introducing democracy is very hard".
Acemoglu, the author of several best-sellers including "Why Nations Fail: The Origins of Power, Prosperity, and Poverty", was considered a top name for the prize this year.
The economics prize wraps up this year's Nobel season, which honoured achievements in artificial intelligence for the physics and chemistry prizes, while the Peace Prize went to Japanese group Nihon Hidankyo, committed to fighting nuclear weapons.
South Korea's Han Kang won the literature prize -- the only woman laureate this year -- while the medicine prize lauded discoveries in understanding gene regulation.
The Nobel Prizes consist of a diploma, a gold medal and a $1 million reward and winners will receive their awards at ceremonies in Stockholm and Oslo on December 10, the anniversary of the 1896 death of scientist and prize creator Alfred Nobel.
© 2024 AFP
Stockholm (AFP) – The Nobel prize in economics was awarded on Monday to Turkish-American Daron Acemoglu and British-Americans Simon Johnson and James Robinson for research into wealth inequality between nations.
Issued on: 14/10/2024 -
Daron Acemoglu, Simon Johnson and James Robinson demonstrated a relationship between societal institutions and prosperity, the Nobel economics jury said
© Christine OLSSON / TT NEWS AGENCY/AFP
By examining the various political and economic systems introduced by European colonisers, the three have demonstrated a relationship between societal institutions and prosperity, the jury said.
"Reducing the vast differences in income between countries is one of our time's greatest challenges," Jakob Svensson, chair of the Committee for the Prize in Economic Sciences, said in a statement.
"The laureates have demonstrated the importance of societal institutions for achieving this," Svensson added.
Acemoglu, 57, and Johnson, 61, are professors at the Massachusetts Institute of Technology (MIT).
Robinson, 64, is a professor at the University of Chicago.
The jury highlighted the laureates' work in illuminating how political and economic institutions play a role in explaining why some countries prosper while others do not.
"Although the poorer countries are, of course, becoming richer, they're not closing the gap," Jan Teorell, a professor of political science and member of the award committee, told a press conference.
"Acemoglu, Johnson and Robinson have shown that a large part of this income gap is due to differences in economic and political institutions in society," Teorell said.
By examining the various political and economic systems introduced by European colonisers, the three have demonstrated a relationship between societal institutions and prosperity, the jury said.
"Reducing the vast differences in income between countries is one of our time's greatest challenges," Jakob Svensson, chair of the Committee for the Prize in Economic Sciences, said in a statement.
"The laureates have demonstrated the importance of societal institutions for achieving this," Svensson added.
Acemoglu, 57, and Johnson, 61, are professors at the Massachusetts Institute of Technology (MIT).
Robinson, 64, is a professor at the University of Chicago.
The jury highlighted the laureates' work in illuminating how political and economic institutions play a role in explaining why some countries prosper while others do not.
"Although the poorer countries are, of course, becoming richer, they're not closing the gap," Jan Teorell, a professor of political science and member of the award committee, told a press conference.
"Acemoglu, Johnson and Robinson have shown that a large part of this income gap is due to differences in economic and political institutions in society," Teorell said.
'Inclusive institutions'
In a statement explaining the prize, the jury noted the example of the city of Nogales, which is divided by the US-Mexican border, where residents on the US side of the city tend to be better off.
"The decisive difference is thus not geography or culture, but institutions," the Royal Swedish Academy of Sciences said.
The US economic system provides residents north of the border greater opportunities to choose their education and profession, and they are part of the US political system, which gives them broad political rights.
By contrast, south of the border, residents live under other economic conditions, and the political system limits their potential to influence legislation.
In addition, the jury noted that the laureates' research also helped explain why some countries become trapped in a situation of "low economic growth."
The Academy said differences between nations could be traced back to the institutions built up by colonial powers.
It said that "in some colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonisers," which would provide only "short-term gains for the people in power".
In others, colonial powers "built inclusive political and economic systems," which would "create long-term benefits for everyone."
So "institutions that were created to exploit the masses are bad for long-run growth."
Conversely, "ones that establish fundamental economic freedoms and the rule of law are good for it."
Acemoglu, who was "delighted" to receive the award, told reporters that the "work that we had done favours democracy."
'Substantial gain'
Speaking via telephone from Athens as the award was announced in Stockholm, Acemoglu said that the economies of "countries that democratise, starting from a non-democratic regime" grow faster than non-democratic regimes.
"And it's a substantial gain," Acemoglu said.
He acknowledged nonetheless that "democracy is not a panacea" and "introducing democracy is very hard".
Acemoglu, the author of several best-sellers including "Why Nations Fail: The Origins of Power, Prosperity, and Poverty", was considered a top name for the prize this year.
The economics prize wraps up this year's Nobel season, which honoured achievements in artificial intelligence for the physics and chemistry prizes, while the Peace Prize went to Japanese group Nihon Hidankyo, committed to fighting nuclear weapons.
South Korea's Han Kang won the literature prize -- the only woman laureate this year -- while the medicine prize lauded discoveries in understanding gene regulation.
The Nobel Prizes consist of a diploma, a gold medal and a $1 million reward and winners will receive their awards at ceremonies in Stockholm and Oslo on December 10, the anniversary of the 1896 death of scientist and prize creator Alfred Nobel.
© 2024 AFP
By AFP
October 13, 2024
The economics prize, the only one not bequeathed by Alfred Nobel in his will, was created in 1968 - Copyright AFP Jonathan NACKSTRAND
Camille BAS-WOHLERT
Closing the season, the Norwegian Nobel Committee will announce the Nobel economics prize on Monday, with specialists on credit, the role of government, and wealth inequality seen as possible contenders.
The winner of the prestigious prize, which last year went to American economist Claudia Goldin, will be announced at 11:45 am (0945 GMT).
Goldin was recognised “for having advanced our understanding of women’s labour market outcomes” and was ironically one of very few women ever handed the prize.
Of the 93 laureates honoured since 1969, only three have been women — Goldin in 2023, her compatriot Elinor Ostrom in 2009 and French-American Esther Duflo in 2019.
“The general trend in society to attach greater importance to parity and diversity has broadened the research process,” Mikael Carlsson, professor of economics at Uppsala University in Sweden, told AFP.
“However, this is not the criteria taken into account when assessing whether a scientific contribution is worthy of a Nobel Prize,” he insisted.
His bet is that Japan’s Nobuhiro Kiyotaki and Britain’s John H. Moore will win for their work on how small shocks can affect economic cycles, or American Susan Athey for her work on market design.
But what criteria should be used to predict a Nobel winner?
For Magnus Henrekson of the Research Institute of Industrial Economics in Stockholm, the most obvious place to start is to look at the research interests of the committee that decides which candidates are worthy.
Its chairman specialises in development economics, though Henrekson said it was doubtful the field would be honoured as it was recently awarded a prize.
“I don’t think it’s likely that the same field will win the prize two years running,” Henrekson said.
– Poverty or wealth inequality? –
Frenchman Philippe Aghion, as well as Americans George Loewenstein, Kenneth Rogoff and Carmen Reinhart are academics often mentioned as worthy of the prize.
Turkish-American Daron Acemoglu, a professor at MIT in the United States and the author of several best-sellers including “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” is considered a top name this year.
Acemoglu could potentially be paired with Russian-American Andrei Shleifer.
Predicting the winner is always tricky, but online statistics platform Statista noted that by looking at past recipients and the state of current research in economics, “we have a decent idea of candidates who are likely to win a Nobel in their career, if not in 2024”.
It believes Acemoglu could get the nod for his “work on the long-run development of institutions which facilitate or hinder economic growth”.
Other possible candidates include macroeconomists such as Frenchman Olivier Blanchard, and Americans Larry Summers and Gregory Mankiw.
Economists who work on wealth inequality, such as France’s Thomas Piketty and Gabriel Zucman as well as French-American Emmanuel Saez have also often been mentioned in recent years.
Canadian-American Janet Currie, a specialist in anti-poverty policies, is a favourite for analytics group Clarivate, which keeps an eye on potential Nobel science laureates based on citations.
It also spotlighted British-Indian Partha Dasgupta as a potential winner for “integrating nature and its resources in the human economy”.
– ‘False Nobel’ –
Paolo Mauro, a former member of the International Monetary Fund, was also put forward for “empirical studies of the effects of corruption on investment and economic growth”.
The economics prize is the only Nobel not among the original five created in the will of Swedish scientist Alfred Nobel, who died in 1896.
It was instead created through a donation from the Swedish central bank in 1968, leading detractors to dub it “a false Nobel”.
However, like for the other Nobel science prizes, the Royal Swedish Academy of Sciences decides the winner and follows the same selection process.
The economics prize wraps up this year’s Nobel season, which honoured achievements in artificial intelligence for the physics and chemistry prizes, while the Peace Prize went to Japanese group Nihon Hidankyo, committed to fighting nuclear weapons.
South Korea’s Han Kan won the literature prize — the only woman laureate so far this year — while the medicine prize lauded discoveries in understanding gene regulation.
The Nobel Prizes consist of a diploma, a gold medal and a one-million-dollar lump sum.
They will be presented at ceremonies in Stockholm and Oslo on December 10, the anniversary of the 1896 death of scientist and prize creator Alfred Nobel.
Nobel economics prize goes to 3 economists who found that freer societies are more likely to prosper
BY DANIEL NIEMANN, MIKE CORDER AND PAUL WISEMAN
October 14, 2024
STOCKHOLM (AP) — The Nobel memorial prize in economics was awarded Monday to three economists who have studied why some countries are rich and others poor and have documented that freer, open societies are more likely to prosper.
The work by Daron Acemoglu, Simon Johnson and James A. Robinson “demonstrated the importance of societal institutions for a country’s prosperity,” the Nobel committee of the Royal Swedish Academy of Sciences said at the announcement in Stockholm.
Acemoglu and Johnson work at the Massachusetts Institute of Technology, while Robinson does his research at the University of Chicago.
Jakob Svensson, chair of the Committee for the Prize in Economic Sciences, said their analysis has provided “a much deeper understanding of the root causes of why countries fail or succeed.”
Reached by the academy in Athens, Greece, where he was to speak at a conference, the Turkish-born Acemoglu, 57, said he was astonished by the award.
“You never expect something like this,” he said.
Acemoglu said the research honored by the prize underscores the value of democratic institutions.
“I think broadly speaking the work that we have done favors democracy,” he said in a telephone call with the Nobel committee and reporters in Stockholm.
But, he added: “Democracy is not a panacea. Introducing democracy is very hard. When you introduce elections, that sometimes creates conflict.”
In an interview with The Associated Press, Robinson, 64, said he doubts that China can sustain its economic prosperity as long as it keeps a repressive political system.
“There’s many examples in world history of societies like that that do well for 40, 50 years,” Robinson said by phone. “What you see is that’s never sustainable. ... The Soviet Union did well for 50 or 60 years.’'
Robinson said many societies have successfully made the transition to what he, Acemoglu and Johnson call an “inclusive society.’’
“Look at the United States,” Robinson said. “This was a country of slavery, of privilege, where women were not allowed to take part in the economy or vote.”
“Every country that is currently relatively inclusive and open made that transition,” he added. “In the modern world, you’ve seen that in South Korea, in Taiwan, in Mauritius.’’
Acemoglu and Robinson wrote the 2012 bestseller, “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” which argued that manmade problems were responsible for keeping countries poor.
In their work, the winners looked, for instance, at the city of Nogales, which straddles the U.S.-Mexico border.
Despite sharing the same geography, climate and a common culture, life is very different on either side of the border. In Nogales, Arizona, to the north, residents are relatively well-off and live long lives; most children graduate from high school. To the south, in Mexico’s Nogales, Sonora, residents are much poorer, and organized crime and corruption abound.
The difference, the economists found, is a U.S. system that protects property rights and gives citizens a say in their government.
Acemoglu expressed worry Monday that democratic institutions in the United States and Europe were losing support from the population.
“Support for democracy is at an all-time low, especially in the U.S., but also in Greece and in the UK and France,“ Acemoglu said on the sidelines of the conference in an Athens suburb.
“And I think that is a symbol of how people are disappointed with democracy,” he said. “They think democracy hasn’t delivered what it promised.’'
Robinson agreed. “Clearly, you had an attack on inclusive institutions in this country,” he said. “You had a presidential candidate who denied that he lost the last election. So President (Donald) Trump rejected the democratic rule of the citizens. ... Of course, I’m worried. I’m a concerned citizen.”
Johnson told the AP that economic pressures were alienating many Americans.
“A lot of people who were previously in the middle class were hit very hard by the combination of globalization, automation, the decline of trade unions, and a sort of shift more broadly in corporate philosophy,’' Johnson said. “So instead of workers being a resource to be developed, which they were in the 19th and early 20th century, they became a cost to be minimized ... Now, that squeezed the middle class.’’
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“We have, as a country, failed to deliver in recent decades on what we were previously very good at, which was sharing prosperity,’' Johnson said.
One key for the future, Johnson said, is how societies manage new technologies such as artificial intelligence.
“AI could go either way,” he said. “AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom. And then, yes, you’re not going to like the political outcomes.’’
In their work, the economists studied institutions that European powers such as Britain and Spain put in place when they colonized much of the world starting in the 1600s. They brought different policies to different places, giving later researchers a “natural experiment” to analyze.
Colonies that were sparsely populated offered less resistance to foreign rule and therefore attracted more settlers. In those places, colonial governments tended to establish more inclusive economic institutions that “incentivized settlers to work hard and invest in their new homeland. In turn, this led to demands for political rights that gave them a share of profits,” the Nobel committee said.
In more densely populated places that attracted fewer settlers, the colonial regimes limited political rights and set up institutions that focused on “benefiting a local elite at the expense of the wider population,” it said.
“Paradoxically, this means that the parts of the colonized world that were relatively the most prosperous around 500 years ago are now those that are relatively poor,” it added, noting that India’s industrial production exceeded the American colonies’ in the 18th century.
The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.
Though Nobel purists stress that the economics prize is technically not a Nobel Prize, it is always presented together with the others on Dec. 10, the anniversary of Nobel’s death in 1896.
Nobel honors were announced last week in medicine, physics, chemistry, literature and peace.
___
Corder reported from The Hague, Netherlands, and Wiseman from Washington. AP reporters David Keyton in Berlin and Elena Becatoros in Athens contributed to this report.
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