This year’s Nobel prize in economics awarded to team that examined what makes some countries rich and others poor
- Written by John Hawkins, Senior Lecturer, Canberra School of Politics, Economics and Society, University of Canberra
The 2024 Nobel Prize in Economics has been awarded to three US-based economists who examined the advantages of democracy and the rule of law, and why they are strong in some countries and not others.
Daron Acemoglu is a Turkish-American economist at the Massachusetts Institute of Technology, Simon Johnson is a British economist at the Massachusetts Institute of Technology and James Robinson is a British-American economist at the University of Chicago.
The citation awards the prize “for studies of how institutions are formed and affect prosperity”, making it an award for research into politics and sociology as much as economics.
At a time when democracy appears to be losing support, the Nobel committee has rewarded work that demonstrates that, on average, democratic countries governed by the rule of law have wealthier citizens.
Johan Jarnestad/Nobel Prize Outreach
More so than in previous years, this year’s winners have written for the public as well as the profession. Acemoglu and Robinson are probably best known for their 2013 best-seller Why Nations Fail: The Origins of Power, Prosperity and Poverty.(It has pictures and no equations.)
Last year Acemoglu and Johnson published Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity.
In May this year Acemoglu wrote about artificial intelligence, putting forward the controversial position that its effects on productivity would be “nontrivial but modest”, which is another way of saying “tiny”. Its effect on wellbeing might be even smaller and it was unlikely to reduce inequality.
Royal Swedish Academy of Sciences.
This year’s award makes the cohort of Nobel winners a little less US-dominated.
Although all three are currently working at American universities, Acemoglu is from Turkey and the others are British. There is even an Australian link. Robinson taught economics at The University of Melbourne between 1992 and 1995.
Winning the prize is life-changing for more reasons than the 11 million Swedish kroner (about $A 1.5 million) the winners share. As Nobel winners, they will have a higher profile. Their opinions will be accorded more respect by most but not all.
Sixteen former winners recently issued a widely reported statement saying they were “deeply concerned about the risks of a second Trump administration for the US economy”. Rather than address their arguments, the Trump campaign called them “worthless out-of-touch Nobel prize winners”.
The new winners might get the same treatment. Johnson has critiqued Trump’s proposal to raise tariffs. Acemoglu has called Trump “a threat to democracy”.
Authors: John Hawkins, Senior Lecturer, Canberra School of Politics, Economics and Society, University of Canberra
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