15 October, 2024
The Nobel Committee has brought attention to worldwide inequalities by awarding its economic prize to three Americans: Daron Acemoglu, Simon Johnson, and James A. Robinson.
The Nobel committee of the Royal Swedish Academy of Sciences said the three won the 2024 Nobel Economics Prize “for studies of how institutions are formed and affect prosperity.”
Committee chair Jakob Svensson said, “Reducing the vast differences in income between countries is one of our time's greatest challenges.” He added that their research has provided “a much deeper understanding of the root causes of why countries fail or succeed.”
The wealthiest 20 percent of the world's countries are now around 30 times richer than the poorest 20 percent, the Royal Swedish Academy of Sciences noted. The difference continues although poor countries have become relatively richer.
In 2021, the World Inequality Report said that the poorest half of the world's population owned just two percent of wealth while the richest 10 percent controlled 76 percent of wealth.
Acemoglu and Johnson work at the Massachusetts Institute of Technology, while Robinson conducts his research at the University of Chicago.
Their findings are included in the 2012 book Why Nations Fail: The Origins of Power, Prosperity, and Poverty written by Acemoglu and Robinson.
In their work, the winners studied the city of Nogales, which sits on both sides of the U.S.-Mexico border.
Despite sharing the same geography, climate, many of the same ancestors and a common culture, life is different on either side of the border. In Nogales, Arizona, to the north, people are relatively wealthy and live long lives; most children complete high school. To the south, in Mexico's Nogales, Sonora, people are much poorer, and the city suffers from organized crime and corruption.
The difference, the economists said, is a U.S. system that protects property rights and gives citizens a say in their government.
The book includes evidence from ancient Rome to modern-day Nogales. It says that “inclusive institutions” make countries richer. It also says democracy, the rule of law and the protection of property rights prevent a small ruling class from owning most resources and wealth.
Reached by the academy in Athens, Greece, the Turkish-born Acemoglu said he was surprised and shocked by the award. He said the research honored by the prize underscores the value of democratic institutions.
“I think broadly speaking the work that we have done favors democracy,” he noted.
The Royal Swedish Academy of Sciences awards the prize in memory of Alfred Nobel. The prize was established after Nobel's death.
I'm Caty Weaver.
Hai Do adapted this story for VOA Learning English from Associated Press, Reuters and Nobel Prize reports.
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Words in This Story
institution –n. an established organization
prosperity –n. a state of growing, improving and being successful
vast –adj. very large in extent or size
transitory –adj. taking place over a relatively short period of time; changing over time