With impeccable timing – given the state of the US presidential race – three economic scholars have been awarded the 2024 Nobel Memorial Prize in Economic Sciences for their groundbreaking research on how stable, inclusive institutions shape a nation’s economic success.
Democracy equals economic success
Daron Acemoglu, a Turkish American professor at the Massachusetts Institute of Technology (MIT), Simon Johnson, a British American economist, and James A Robinson, an English scholar, have extensively studied the role of political institutions and their impact on economic performance and global prosperity.
Their work demonstrates that nations with inclusive institutions, a commitment to the rule of law and reduced extraction of resources by elites tend to experience long-term economic growth.
The Royal Swedish Academy of Sciences announced the award on Monday in Stockholm.
"Reducing the vast differences in income between countries is one of our time's greatest challenges,” noted Jakob Svensson, chair of the prize committee.
“The laureates have demonstrated the importance of societal institutions for achieving this."
Speaking at the press conference, Acemoglu expressed surprise and relief at receiving the honour while in Athens, avoiding an early morning call.
Sustainability of institutions
He said that while democracy was often linked to economic growth, it was the stability of long-term democracies that drove success.
Acemoglu cautioned against equating rapid authoritarian growth with sustainability, emphasising that democracies must reclaim the promise of good governance.
The prize will be formally awarded on December 10, along with a cash reward of 11 million Swedish kronor (US$1.57 million), to be shared among the three economists.