What explains the prosperity of nations? Economists Daron Acemoglu, Simon Johnson and James Robinson were awarded the 2024 Nobel Prize in Economics on Monday for the answers they provided to this broad question.
“Today, the richest 20% of countries are around 30 times richer than the poorest 20%”, and this gap persists over time, recalled Monday Professor Jan Teorell, member of the committee for the prize. in economic sciences in memory of Alfred Nobel, during the announcement of the laureates in Stockholm. The latter “helped us understand the differences in prosperity between nations,” explains the committee in a document.
The winners of the prestigious award have established that the wealth of countries is largely dependent on their political and economic institutions. They observed a “reversal of fortune”, that is to say that the richest places before colonization became the poorest after, and vice versa.
To arrive at these conclusions, researchers studied European colonization around the world using a model combining economic and political science. In countries that were once wealthier, the goal of colonization was to exploit indigenous populations and extract natural resources, the committee explains. This control was facilitated by population density, which allowed the enslavement of large populations with few settlers. Political power has been concentrated in the hands of an elite, who have enriched themselves in the short term. These countries are poorer today.
In other countries, once poorer and less densely populated, Europeans had to settle in larger numbers to gain control. They have established so-called “inclusive” institutions for their own benefit, including the right to vote, well-defined property rights, the rule of law and public infrastructure. These countries are richer today.
“Specifically, since economic growth depends heavily on widespread technological innovation, such progress is only sustainable as countries promote a set of individual rights, including property rights, incentivizing more people to invent things. Elites may resist innovation, change, and growth to maintain power, but without the rule of law and a stable set of rights, innovation and growth stagnates,” summarizes MIT News in an article published Monday.
Bad times for democracies
Daron Acemoglu and Simon Johnson are professors at the Massachusetts Institute of Technology (MIT), while James Robinson is a professor at the University of Chicago.
If we understand better thanks to their research the conditions necessary for the enrichment of nations, there is no miracle recipe to achieve this, specifies Daron Acemoglu in a telephone interview with the committee. “I think that, generally speaking, the work we have done is in favor of democracy,” but democracy “is not a panacea.” He also says he fears an erosion of support for this political system. He also added that in general, in his opinion, “authoritarian regimes [comme la Chine]for various reasons, will find it more difficult to achieve long-term sustainable innovation results.”
Simon Johnson brought a note of hope for countries struggling to enrich themselves and take the democratic turn. “There is no predestination. It all depends on the choices we make, particularly in terms of technology,” he said in an interview with Bloomberg Television on Monday. He also deplored corruption, which keeps several countries in poverty. “The key [pour s’enrichir] is to focus on inclusive prosperity. How can we create more good jobs for more people? »
The Swedish Bank Prize in Economic Sciences in Memory of Alfred Nobel — commonly known as the “Nobel Prize in Economics” — is awarded by the Swedish central bank. It comes with a grant of 11 million crowns (approximately 1.5 million Canadian dollars), to be shared equally among the winners. The Bank of Sweden Prize will be awarded at the same time as the “official” Nobel Prizes on December 10, the anniversary of Alfred Nobel’s death in 1896.
With the Associated Press in Stockholm
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