Nobel Prize in Economics for 2024
Nobel Prize in Economics for 2024

Summary/Abstract: The 2024 Nobel Prize in Economic Sciences was awarded to Daron Acemoglu, Simon Johnson, and James Robinson for their research on how institutions are formed and affect prosperity. Their work explores the complex relationship between institutions and economic growth, explaining differences in wealth and economic performance between countries. The key distinction is between extractive and inclusive institutions. Extractive institutions concentrate power in the hands of a narrow elite, while inclusive institutions allow broader participation. The authors' research uses historical data and examines the long-term impact of colonialism on institutional development, highlighting how colonial policies influenced the creation of either extractive or inclusive institutions depending on factors like disease environments and population density. Their models also examine the components shaping political institutions: conflict over resource distribution, the ability of the masses to mobilize, and the problem of commitment for elites maintaining power while reforming. The article discusses the implications of their findings for understanding persistent economic inequality and the challenges of transitioning from extractive to inclusive institutions, as well as their broader contributions through popular books like "Why Nations Fail." Criticisms regarding the methodological approach and broad definition of "institution" are also addressed.

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