Nobel Economics Prize awarded for research into why countries succeed or fail

STOCKHOLM, OCTOBER 14: The Nobel memorial prize in Economics was awarded Monday to Daron Acemoglu, Simon Johnson and James A Robinson for research into reasons why some countries succeed and others fail.

The Nobel memorial prize in Economics was awarded Monday to Daron Acemoglu, Simon Johnson and James A Robinson for research into differences in prosperity between nations.

The three Economists “have demonstrated the importance of societal institutions for a country’s prosperity”, the Nobel committee of the Royal Swedish Academy of Sciences said at the announcement in Stockholm.

“Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better. The Laureates’ research helps us understand why”, it added.

Acemoglu and Johnson work at the Massachusetts Institute of Technology and Robinson conducts his research at the University of Chicago.

“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”, Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences, said.

“They have identified the historical roots of the weak institutional environments that characterize many low-income countries today”, he told a press conference. The award came a day after World Bank report showed that the world’s 26 poorest countries – home to 40% of its most poverty-stricken people – are more in debt than at any time since 2006, highlighting a major reversal in the fight against poverty.

He said their research has provided “a much deeper understanding of the root causes of why countries fail or succeed.”

Reached by the Academy in Athens, Greece, where he is due to speak at a conference, Acemoglu said he was surprised and shocked by the award.

“You never expect something like this”, he said.

Acemoglu told the Nobel press conference that data gathered by pro-democracy groups showed that public institutions and rule of law in many parts of the world were being weakened.

“I think this is a time when democracies are going through a rough patch”, Acemoglu said. “And it is in some sense quite crucial that they reclaim the high ground of better governance, cleaner governance and delivering sort of the promise of democracy to a broad range of people.”

The Economics Prize is formally known as the Sveriges Riksbank (Bank of Sweden) Prize in Economic Sciences in Memory of Alfred Nobel. It is the final prize to be given out this year and is worth 11 million Swedish crowns ($1.1 million).The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the 5 Nobel Prizes.

Though Nobel purists stress that the Economics Prize is technically not a Nobel Prize, it is always presented together with the others on December 10, the anniversary of Nobel’s death in 1896.

Nobel honors were announced last week in Medicine, Physics, Chemistry, Literature and Peace.

(AP/Agencies)