Three Receive Nobel in Economics for Research on Global Inequality

Daron Acemoglu, Simon Johnson and James Robinson shared the award for their work on explaining the gaps in prosperity between nations.

The Nobel Memorial Prize in Economic Sciences was awarded on Monday to Daron Acemoglu and Simon Johnson, both of the Massachusetts Institute of Technology, and to James Robinson of the University of Chicago.

They received the prize for their work on the gaps in prosperity between nations, and for their research on how institutions affect economic progress.

The laureates used both theory and data to better explain inequality between countries, according to the prize committee.

“Reducing the vast differences in income between countries is one of our time’s greatest challenges,” Jakob Svensson, chairman of the economics prize committee, said in a statement. “The laureates have demonstrated the importance of societal institutions for achieving this.”

Their research has shown that the institutions that were introduced during European colonization have helped to shape economic outcomes in the once-colonized countries.

“Rather than asking whether colonialism is good or bad, we note that different colonial strategies have led to different institutional patterns that have persisted over time,” Dr. Acemoglu said during a news conference after the prize was announced.

Their findings suggest that inclusive institutions tend to put countries on a pathway to longer-term prosperity, while extractive ones — designed to retain control — provide short-term gains for the people in power.

“Broadly speaking, the work that we have done favors democracy,” Dr. Acemoglu said. “But democracy is not a panacea.”

Democracy can be hard to introduce, he noted, and there are pathways to growth for countries that are not democracies, including rapidly tapping a nation’s resources to ramp up economic progress. But he said that “more authoritarian growth” is often more unstable and less innovative.

The laureates found that colonization brought about a major change in global fortunes. Places that were densely populated at the time of colonization tended to be lorded over by authoritarian institutions, while those that were sparsely populated often saw more settlers and established a more inclusive form of governance — if not quite a democratic one.

Over time, that led to a reversal of fortunes: While the Aztec empire was more populous and rich than North America at the time of early European exploration, today the United States and Canada have outstripped Mexico in prosperity.

“This reversal of relative prosperity is historically unique,” the Nobel release explained. “If we look at the parts of the globe that were not colonized, we do not find any reversal of fortune.”

The legacy is still visible today. For an example, Dr. Acemoglu and Dr. Robinson have pointed to the city of Nogales, which straddles the border between Mexico and Arizona.

Northern Nogales is more affluent than the southern portion, despite a shared culture and location. The driver of differences, the economists argue, is the institutions governing the two halves of the city.

The economists have written books based on their research, including “Why Nations Fail,” by Dr. Acemoglu and Dr. Robinson, and “Power and Progress” by Dr. Acemoglu and Dr. Johnson, out last year.

Dr. Acemoglu has long topped lists of who might win a Nobel, but he said that the award was not something that one could anticipate. He was in Athens when he got the call.

“You dream of having a good career, but this is over and on top of that,” Dr. Acemoglu said during the news conference.

Dr. Johnson, the former chief economist at the International Monetary Fund, woke up to a bevy of congratulatory text messages in the United States. He said in an interview that he was “surprised and delighted.”

Other economists welcomed the announcement.

“They revived and made cool again the study of institutions in mainstream economics,” Dani Rodrik, an economist at the Harvard Kennedy School who studies globalization and development, wrote on social media.

Who was awarded the economics prize in 2023?

Last year, Claudia Goldin was awarded for her research uncovering the reasons for gender gaps in labor force participation and earnings.

Who else received a prize this year?

• The Nobel in physiology or medicine went to Victor Ambros and Gary Ruvkun for their discovery of microRNA, which helps determine how cells develop and function.
• The award for physics was awarded to John J. Hopfield and Geoffrey E. Hinton for discoveries that helped computers learn more in the way that the human brain does, providing the building blocks for developments in artificial intelligence.
• The prize for chemistry was shared between Demis Hassabis and John Jumper of Google, who used A.I. to predict the structure of millions of proteins; and David Baker, who used computer software to invent a new protein.
• The literature prize went to Han Kang, the first writer from South Korea to receive the award, for “her intense poetic prose that confronts historical traumas.”
• The Nobel Peace Prize was awarded to the Japanese grass-roots movement Nihon Hidankyo, which for decades has represented hundreds of thousands of survivors of the U.S. atomic bombings of Hiroshima and Nagasaki in 1945.