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Economists Ester Duflo, Michael Kremer and Abhijit Banerjee win Nobel prize in economics for research on institutions and prosperity

Economists Ester Duflo, Michael Kremer and Abhijit Banerjee win Nobel prize in economics for research on institutions and prosperity

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Daron Acemoglu, Simon Johnson, and James Robinson have won the 2024 Nobel Prize in economics. The Nobel committee recognized their work demonstrating the importance of societal institutions for a country's prosperity. They highlighted the significance of institutions in determining a country's economic outcomes, and specifically noted the benefits of more inclusive institutions, a commitment to the rule of law, and reduced extraction of resources by elites. The Nobel committee stated that societies with poor rule of law and exploitative institutions do not generate growth or improve their conditions, and that reducing vast income differences between countries is one of the greatest challenges of our time. The three economists work at prominent institutions: Acemoglu and Johnson at the Massachusetts Institute of Technology, and Robinson at the University of Chicago.

Nobel Foundation
1. Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better. The laureates' research helps us understand why.
Nina Skero
1. They're saying that if you look at historically … places where colonial powers implemented better institutions, … ended up faring better and generating more wealth, particularly in periods of time when industrialisation came around.
Daron Acemoglu
Massachusetts Institute of Technology
1. They think democracy hasn't delivered what it promised, and I think it is important that it does so.
2. Support for democracy is at an all-time low, especially in the U.S., but also in Greece and in the UK and France.
3. I think this is a time when democracies are going through a rough patch.
4. And I think that is a symbol of how people are disappointed with democracy.
5. A lot of people who were previously in the middle class were hit very hard by the combination of globalization, automation, the decline of trade unions, and a sort of shift more broadly in corporate philosophy.
6. I am delighted. It's just a real shock and amazing news.
7. I think broadly speaking the work that we have done favors democracy.
Simon Johnson
Harvard University
1. So instead of workers being a resource to be developed, which they were in the 19th and early 20th century, they became a cost to be minimized in many settings. Now, that squeezed the middle class.
2. We have, as a country, failed to deliver in recent decades on what we were previously very good at, which was sharing prosperity.
3. AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom. And then, yes, you're not going to like the political outcomes.
4. What you see is that's never sustainable. ... The Soviet Union did well for 50 or 60 years. Argentina was one of the richest countries in the world at the time of the First World War. What our theory predicts is that's a transitory situation.
James Robinson
University of Chicago
1. There's many examples in world history of societies like that that do well for 40, 50 years.

Economists Ester Duflo, Michael Kremer and Abhijit Banerjee win Nobel prize in economics for research on institutions and prosperity

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