Daron Acemoglu, Simon Johnson and James A. Robinson were awarded the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for "studies of how institutions are formed and affect prosperity," according to a post on X by the official account for the Nobel Prize on Monday.
The economists were able to prove that the incessant income gap between the richest and poorest countries is correlated with differences in societal institutions, despite poorer countries seeing income growth, a press release from the Royal Swedish Academy of Sciences said.
They also provided a key explanation regarding the current differences in prosperity of the nations, demonstrating that it was due to the political and economic systems introduced or retained by colonisers starting from the sixteenth century. The laureates were able to demonstrate "a reversal of fortune."
"The places that were, relatively speaking, the richest at their time of colonisation are now among the poorest," according to the press release.
The Nobel Prize winners also proved that the higher the mortality rate was for the colonisers, the lower was the country's current gross domestic product per capita. This was due to the danger involved in colonising areas and shaping the way societies were shaped.
The laureates have also developed a theoretical framework explaining the reason why some societies become stuck in a trap with what they called 'extractive institutions' and why escaping from this trap is so difficult.
"However, they also show that change is possible and that new institutions can be formed. In some circumstances, a country can break free of its inherited institutions to establish democracy and the rule of law. In the long run, these changes also lead to reduced poverty," the press release said.
Ragnar Frisch and Jan Tinbergen were first awarded the Sveriges Riksbank Prize in Economic Sciences in 1969.
Sveriges Riksbank, Sweden's central bank, set up the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1968. The prize is based on a donation given to the Nobel Foundation in 1968 from Sveriges Riksbank on the bank's 300th anniversary.
The prize amount is the same as the one for the Nobel Prize and is paid by Sveriges Riksbank.
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