The Nobel Memorial Prize in Economic Sciences was awarded on money to two MIT and one University of Chicago scientist. The scientists Daron Acemoglu, Simon Johnson, and James Robinson, respectively, received the Nobel in Economics for their top-tier research on how institutions around the world shape which country becomes wealthy and prosperous. Their research also included how those structures came into existence in the first place.
The laureates explored the colonial history of the world to identify how disparities between nations arose. They asserted that countries with more inclusive institutions during the colonial era typically achieved greater prosperity. According to the Nobel Committee, their groundbreaking combination of theory and data has provided deeper insights into the enduring inequality among nations.
While announcing the winner, Jakob Svensson, the chairman of the economic prize committee, said, “Reducing the huge differences in income between countries is one of our times’ greatest challenges. we have a much deeper understanding of the root causes of why countries fail or succeed.”
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The researchers suggest that a nation’s current prosperity is partly shaped by the historical evolution of its institutions, which they analyzed by examining the impact of European colonization. Nations with “inclusive” institutions that safeguarded property rights and encouraged broad economic participation were more likely to achieve long-term prosperity. In contrast, those with “extractive” institutions—designed to benefit elites while offering little opportunity for workers to share wealth—primarily delivered short-term advantages to those in power.
One of the Nobel Laureates, Dr Daron Acemoglu said in a news conference after the award ceremony, “Rather than asking whether colonialism is good or bad, we note that different colonial strategies have led to different institutional patterns that have persisted over time.”
