Institutions and Prosperity: Nobel Prize Awarded for Groundbreaking Research

The prestigious Royal Swedish Academy of Sciences has awarded the Nobel Memorial Prize in Economic Sciences this year to three outstanding economists. Honored were Daron Acemoglu, originally from Turkey, Simon Johnson, a British native, both from the esteemed Massachusetts Institute of Technology, as well as James A. Robinson, also British and affiliated with the University of Chicago. They received the award for their fundamental studies on the emergence of institutions and their impact on economic growth. Economics has always been concerned with the significance of institutions. This year's laureates have analyzed empirical data and demonstrated which economic institutions promoted or hindered growth and what factors led to their emergence. In line with Adam Smith, they argue that property rights and the rule of law are of central importance. In their view, governments pay attention to these two pillars because political elites share the fruits of economic growth with the broader population, rather than exploiting the wealth of the masses.