Daron Acemoglu, Simon Johnson and James A. Robinson were jointly awarded the Swedish central bank's 2024 prize for economic sciences, awarded in Alfred Nobel's memory for work on the formation of institutions and their effect on national prosperity.
The Royal Swedish Academy of Sciences said the three economists had deepened understanding of why large income gaps persist between countries. Acemoglu and Johnson were based at the Massachusetts Institute of Technology, while Robinson was at the University of Chicago. The prize carried 11 million Swedish kronor, divided equally among them.
Their research distinguishes broadly between inclusive institutions, which distribute political influence and economic opportunity, and extractive institutions, which concentrate power and resources among a limited group. The academy said countries marked by weak legal protections and systems designed to exploit much of the population generally struggle to produce durable, widely shared growth.
A central part of the laureates' work examined institutions created during European colonisation. Colonial authorities did not establish the same systems everywhere. In some places, they built arrangements intended mainly to remove resources and control local populations. Elsewhere, settler communities developed political and economic structures designed to support longer-term participation. The researchers used those differences to help account for reversals in relative prosperity among former colonies over time.
The work also addresses why inefficient institutions can survive even when reform could benefit society as a whole. Groups controlling an extractive system can gain in the short term and may be unable to make credible promises that future reforms will endure. Citizens, expecting those promises to be reversed once immediate pressure fades, have little reason to trust them.
That problem of credibility can also illuminate transitions toward democracy. When leaders face the risk of unrest, policy concessions alone may not persuade the public. Relinquishing some power through durable political reform can become the only believable way to commit to change. The framework therefore links economic outcomes not simply to policy choices, but to who holds authority and how limits on that authority are enforced.
The prize committee presented the research as relevant to one of economics' most persistent questions: why some societies become prosperous while others remain poor. Its decision recognised a body of comparative historical and theoretical work, rather than a claim that institutions are the sole influence on development. By identifying mechanisms that preserve or change political rules, the laureates supplied tools for analysing both long-run income differences and the difficult path from concentrated power to broader participation.
Acemoglu was born in Istanbul, Johnson in Sheffield, and all three completed doctoral training before holding their listed US academic posts.
