Nobel economics prize goes to researchers of prosperity

STOCKHOLM - Three US-based academics won the 2024 Nobel economics prize on Oct 14 for research that explored the aftermath of colonisation to understand why global inequality persists today, especially in countries dogged by corruption and dictatorship.

The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final prize to be given out in 2024 and went to professors Daron Acemoglu, Simon Johnson and James Robinson. The award is worth 11 million Swedish kronor (S$1.38 million).

“Reducing the vast differences in income between countries is one of our time’s greatest challenges. The laureates have demonstrated the importance of societal institutions for achieving this,” said Mr Jakob Svensson, chairman of the Committee for the Prize in Economic Sciences.

The award organisers said on their website: “Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better.”

Prof Acemoglu and Prof Johnson work at the Massachusetts Institute of Technology, while Prof Robinson is at the University of Chicago.

Prof Acemoglu and Prof Johnson recently collaborated on a book surveying technology through the ages, which demonstrated how some technological advances were better at creating jobs and spreading wealth than others.

Reversal of fortune

The laureates’ research showed how European colonisation had dramatic but divergent impacts across the world, depending on whether the coloniser focused on extraction of resources or the setting up of long-term institutions for the benefit of European migrants.

This, they found, resulted in a “reversal of fortune”. Former colonies that were once rich become poor, while some poorer countries – where institutions were often set up – were in the end able to garner some generalised prosperity through them.

The economics award is not one of the original prizes for science, literature and peace created in the will of dynamite inventor and businessman Alfred Nobel and first awarded in 1901, but a later addition established and funded by Sweden’s central bank in 1968.

Past winners include a host of influential thinkers such as Professor Milton Friedman, Dr John Nash – played by actor Russell Crowe in the 2001 film A Beautiful Mind – and, more recently, former US Federal Reserve chairman Ben Bernanke.

In 2023, Harvard economic historian Claudia Goldin won the prize for her work highlighting the causes of wage and labour market inequality between men and women.

The economics prize has been dominated by US academics since its inception, while US-based researchers also tend to account for a large portion of winners in the scientific fields for which 2024 laureates were announced last week.

That crop of prizes began with US scientists Victor Ambros and Gary Ruvkun winning the prize for medicine on Oct 7 and concluded with Japan’s Nihon Hidankyo, an organisation of survivors from Hiroshima and Nagasaki who campaigned for the abolition of nuclear weapons, landing the award for peace on Oct 11. REUTERS