(CNN) – A trio of economists won the Nobel Prize in Economics this Monday for their “studies of how institutions form and affect wealth.”
Darren Acemoglu, Simon Johnson and James Robinson will share the 11 million Swedish crowns ($1 million) prize.
The Nobel committee praised the trio for explaining “why societies with poor rule of law and institutions that exploit people do not generate development or create better change.”
“When Europeans colonized large parts of the world, the institutions of those societies changed,” the group said, citing the trio’s work. While in many places it was aimed at exploiting the indigenous population, in others it laid the foundation for inclusive political and economic systems.
“The awardees demonstrate that one explanation for differences in countries’ prosperity is the social institutions introduced during the colonial period,” the panel added.
Countries that developed “inclusive institutions” have become more prosperous over time, while countries that have developed “extractive institutions” continue to experience low economic growth.
Acemoglu, a Turkish-American professor at the Massachusetts Institute of Technology, and Robinson, a British professor at the University of Chicago, argue in their 2012 book “Why Countries Fail” that some countries are richer than others because of their political institutions. and economics.
The book begins by comparing the living standards of two towns called Nogales: one in Arizona and the other south of the border, in the Sonora region of Mexico. While some economists argue that differences in climate, agriculture, and culture have a major impact on a place’s prosperity, Acemoglu and Robinson argue that residents of Nogales, Arizona, are healthier and wealthier because of the relative strength of their local institutions.
The Alfred Nobel Prize in Economics is officially known as the Bank of Sweden Prize for Economic Sciences. Unlike the physics, chemistry, medicine, literature and peace prizes, it was not established by a Swedish businessman, but rather by Sweden’s central bank in 1968.
Last year, Professor Claudia Goldin of Harvard University received the award for her research on working women.
Using over 200 years of data from the United States, Goldin demonstrates how the nature of the gender wage gap has changed over time. Historically, most of the gap can be explained by differences in education and occupation. But in more recent history, he found that most of the gap was between men and women in the same occupation, and that it often manifested itself when a woman gave birth to her first child.
This is a developing story and will be updated.
