In a resounding nod to the inextricable link between political systems and economic prosperity, MIT economists Daron Acemoglu and Simon Johnson, alongside the University of Chicago's political scientist James Robinson, have been named recipients of the 2024 Nobel Prize in Economic Sciences. As reported by MIT News, the trio's work, spanning over two decades, has shed light on how democracies that adhere to the rule of law and uphold individual rights can fuel economic activity and foster long-term growth.
According to a statement obtained by MIT News, the Swedish Royal Academy of Sciences highlighted that societies with weak rule of law and institutions that harness the power central to a few fail to produce meaningful growth or positive change. The laureates' extensive research was instrumental in establishing that "inclusive" political systems, which disseminate political and property rights widely while safeguarding laws and offering public infrastructure, typically experience greater long-term economic growth compared to "extractive" systems where power is concentrated among the elite.
Acemoglu expressed his amazement and delight in an MIT News interview, characterizing their collective research as different historical trajectories providing ripe testing grounds for long-term economic impacts. Johnson also commented on the importance of history in understanding nation development, reminding readers that understanding critical historical factors is essential, though not determinative. These insights have been central to the models they developed to account for political changes in many countries, analyzing the factors that shape historical transition of governments.
Both Acemoglu and Johnson have made notable contributions beyond their joint efforts. Acemoglu's work spans labor economics, exploring the dynamics between skills and wages, as well as the implications of automation on employment and economic growth. Johnson has delved into development issues, the finance sector and regulation, and how technology can potentially advance—or impede—broad-based prosperity. Their individual achievements have led Agustin Rayo, dean of MIT’s School of Humanities, Arts, and Social Sciences, to describe today’s Nobel Prize as well-deserved.
Throughout their careers, the celebrated economists have not only shaped academic understanding but have also produced influential literature for the wider public. Among these works is the book "Why Nations Fail," co-authored by Acemoglu and Robinson in 2012, which synthesized much of their research on political institutions and their impact on economic growth. Moreover, Acemoglu and Johnson's 2023 release, "Power and Progress: Our 1,000-Year Struggle over Technology and Prosperity," further examines the historical contention over the economic benefits of technological advances, such as artificial intelligence.
The accolade places Acemoglu and Johnson among a distinguished group of MIT-affiliated Nobel laureates. MIT alumni and former faculty have garnered this recognition multiple times, with eight current MIT faculty members receiving the award prior to 2024. This recognition serves as a testament to the institute's standing as a cradle of economic thought and an incubator for ideas that resonate far beyond academia, into the realm of global policy and societal progress.