« Dussehra Greetings! | Main | Timex is celebrating 170 Years of Watchmaking by releasing a limited-edition Anniversary Watch for just $1. »
October 14, 2024
Three economists have won the 2024 Nobel Prize in Economics for their studies on how institutions are formed and their impact on prosperity.
Stockholm, October 14, 2024 — The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 to:
Daron Acemoglu
Massachusetts Institute of Technology, Cambridge, USA
Simon Johnson
Massachusetts Institute of Technology, Cambridge, USA
James A. Robinson
University of Chicago, IL, USA
“for studies of how institutions are formed and affect prosperity.”
“They have helped us understand differences in prosperity between nations.”
The 2021 laureates in economic sciences, Daron Acemoglu, Simon Johnson, and James Robinson, have highlighted the significance of societal institutions in determining a country’s prosperity. Their research emphasizes that societies with weak rule of law and exploitative institutions struggle to foster economic growth and positive transformation.
When Europeans colonized large parts of the globe, the institutions in those societies changed. This change was sometimes dramatic, but it did not occur the same way everywhere. In some places, the goal was to exploit the indigenous population and extract resources for the colonizers’ benefit. In other areas, the colonizers established inclusive political and economic systems for the long-term benefit of European migrants.
Research conducted by Nobel laureates has highlighted the impact of societal institutions established during colonization on countries’ prosperity. They found that implementing inclusive institutions in poorer colonized nations contributed to long-term prosperity. This insight helps us understand why some previously wealthy colonies are now impoverished and vice versa.
In some countries, the presence of extractive institutions and low economic growth presents a challenge. Transitioning to inclusive institutions would bring about long-term benefits for everyone. However, the short-term gains provided by extractive institutions often serve the interests of those in power. As long as the political system guarantees their continued control, it’s difficult for people to trust promises of future economic reforms. According to the laureates, this lack of trust is a significant obstacle to improvement.
In times of potential revolution, those in power face a challenging decision. While they may initially attempt to appease the public with promises of economic reforms, the lack of credibility in these promises can ultimately lead to the establishment of democracy as the most viable solution.
“Reducing the significant income disparities between nations is one of the most pressing challenges of our time. The laureates have highlighted the crucial role of societal institutions in addressing this issue,” stated Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences.
Source: The Royal Swedish Academy of Sciences
|GlobalGiants.Com|
Edited & Posted by the Editor | 11:06 AM | Link to this Post
