American-Turkish Economist with Armenian Roots Wins Nobel Prize for Work on Institutions and Prosperity

In 2024, the Nobel Prize in Economic Sciences was awarded to three scholars for their important research on how institutions affect the prosperity of nations. The prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was given to Daron Acemoglu, an American-Turkish economist with Armenian roots, and two American scholars, Simon Johnson and James A. Robinson. Their joint work explores how the formation of societal institutions impacts the wealth and development of countries.

The work of these three economists has provided a clearer understanding of why some countries are wealthy, while others remain poor. Their studies focus on the role that institutions—such as governments, legal systems, and other structures that organize society—play in shaping the economic fortunes of nations. The Nobel Prize committee said how their research traces these differences back to the time of colonization.

During colonization, the institutions introduced by colonizers varied widely depending on the region's initial economic conditions. In regions that were poor when they were colonized, more inclusive institutions were often established. These institutions allowed broader participation in the economy and government, leading to a more prosperous population over time. In contrast, wealthier regions during the colonial period often saw the establishment of extractive institutions, designed to benefit a few at the expense of the many, which hindered long-term development.

The findings of Acemoglu, Johnson, and Robinson shed light on the lasting effects of colonization on modern nations. Countries that were once considered wealthy have often become poor, while many nations that were colonized in poverty have seen growth and prosperity. This reversal of fortunes can be explained, in part, by the types of institutions that were put in place by colonial powers.

Their work shows how critical it is to have institutions that are inclusive, meaning they allow broad participation from all parts of society. Such institutions ensure that a country’s resources are used for the benefit of many, rather than a select few. By looking at historical examples, the scholars have demonstrated that inclusive institutions can lead to sustained economic growth and a more equitable society.

The names of the three laureates were announced during a ceremony held at the Karolinska Institutet in Stockholm, Sweden. The Nobel Prize committee praised the scholars for their contributions to the field of economics and for helping to deepen our understanding of global economic development.

Daron Acemoglu, Simon Johnson, and James A. Robinson are celebrated not only for their academic achievements but also for the practical implications of their work. Their research can help policymakers and leaders around the world understand how to design better institutions that promote growth, equality, and long-term prosperity.

This year's Nobel Prize in Economic Sciences shows the importance of studying history to understand the present.