Nobel economics prize awarded for revealing why nations stay poor

Their research highlighted the crucial role of institutions in national prosperity, as noted by the Nobel committee. Poor institutions hinder economic development.

Jakob Svensson, Chair of the Committee, emphasised their contribution to understanding why reducing income disparities between countries requires strong institutions.

Acemoglu and Johnson work at MIT, while Robinson is based at the University of Chicago, highlighting the collaboration between major academic institutions.

Acemoglu noted that their work supports democracy but cautioned that democracy alone isn’t a solution. Establishing democratic systems can be fraught with challenges.

Acemoglu argued that authoritarian regimes, like China, face significant difficulties in achieving long-term sustainable innovation due to institutional weaknesses.

Their research compares Nogales in the U.S. and Mexico, showing that despite similar geography, stronger U.S. institutions lead to better living standards and prosperity.

Their 2012 book, Why Nations Fail, explored how manmade factors, such as poor governance and corruption, contribute to keeping nations in poverty.

The economics prize will be presented on 10 December alongside other Nobel awards, despite its distinct origins, marking Alfred Nobel’s death anniversary.