Daron Acemoglu, Simon Johnson and James A. Robinson won the Nobel Prize in Economics, the final award of the year given in recognition of outstanding contributions to humanity, according to the Nobel Foundation in Sweden.
The prize was awarded to the three economists for their empirical and theoretical studies exploring differences in the prosperity of nations.
The Royal Swedish Academy of Sciences highlighted that the winners raise new strategies to understand inequality.
Acemoglu, an American academic of Turkish origin, and Johnson, of British origin, work at MIT Cambridge USA (Massachusetts Institute of Technology), while Robinson, also British, is a professor at the University of Chicago.
The Swedish academy highlighted that “the richest 20% of the world’s countries are 30 times richer than the poorest 20%. The income gap between the richest and poorest is also persistent; Although poor countries have gained wealth, they are not catching up with the most prosperous ones.”
“Inclusive” and “extractive” institutions
The Nobel Committee recognized that the issue is not new, but that the laureates had found new and compelling evidence for an explanation for that gap: the differences in the institutions of a society.
The committee praised the work of the three economists for their explanations of how “societies with weak principles of law and institutions that exploit the population do not generate growth or change for the better.”
According to the work of the winners, “one explanation for the differences in the prosperity of countries is due to the social institutions that were established during colonization.”
The committee noted that when Europeans colonized large parts of the world, the institutions in those societies changed. While in some places institutions established the foundations for inclusive political and economic systems, in many others they had the objective of exploiting the indigenous population.
The analysis then divides the institutions into “inclusive” and “extractive”.
The example of Nogales
The jury highlighted the work of the winners around the city of Nogales, which is divided by the border between Mexico and the United States, where the American side is more prosperous.
The economic system in the US offers residents north of the border greater opportunities to choose their education and profession, while being part of the US political system, granting them broad political rights.
In contrast, south of the border, residents live under different economic conditions, and the political system there limits their potential to influence legislation.
“So the decisive difference is not geography or culturebut the institutions,” explained the academy.
“The introduction of inclusive institutions would create long-term benefits for all, but extractive institutions are those that provide short-term gains for those in power,” the jury declared.
When contacted by phone, Daron Acemoglu said he was “delighted” with the award and noted that the work they have done benefits democracy.
“Countries that democratize, starting from a non-democratic regime, in the end grow about eight, nine years faster than non-democratic regimes. “That is substantial growth.”
He acknowledged, however, that “democracy is not a panacea” and that “implementing democracy is very difficult.”
The three award-winning economists They will share the prize that includes a figure of US$1 million.
The Nobel Prize in Economics was established in 1968 by the Sveriges Riksbank (Central Bank of Sweden) and the Royal Swedish Academy of Sciences is in charge of selecting the winning person, group of people or institution.
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