Daron Acemoğlu, who, together with Simon Johnson and James Robinson, won the Nobel Prize for Economics 2024, was the protagonist of the ‘EoF On Air Global Gathering’, the 4th global meeting of The Economy of Francesco, live from Assisi on 6 October 2023
by Andrea Fazio*
‘Well, if he doesn't win it this year he will next year.’ Over the past few years, this is one of the phrases I have most often heard (and sometimes even said) while talking to colleagues as the day of the announcement of the Nobel Prize for Economics approached. So the fact that Acemoglu would get the Nobel sooner or later was somehow a given to all, but the question of ‘when’ it would happen sometimes became so pressing that it risked supplanting the question of ‘why’. Why dié Daron Acemoğlu, Simon Johnson and James Robinson win the Nobel Prize?
The shortest answer, easy and difficult at the same time, is that these three authors had the courage to put big questions at the centre of the debate, fundamental questions to which we have not yet been able to give definitive answers. These questions, however, have become inescapable for both the scientific community and society as a whole. Questions such as: is democracy really important for the economic growth of a country? Who decides on how to allocate and distribute resources in an economy? And, above all, what consequences do these decisions have in the long run?
With their work, Acemoğlu, Johnson and Robinson not only tried to give some answers to these questions, but also laid the groundwork for further reflection. Their greatest contribution was, in fact, not so much to close the debate, but rather to open it up in a structured way, forcing the academia and politics to seriously confront these questions.
In particular, their research has shown how inclusive institutions, which enable the political and economic participation of large sections of the population, are crucial for ensuring sustainable economic growth. This concept was expounded in depth in the book ‘Why Nations Fail’, where Acemoğlu and Robinson argue that nations prosper when institutions incentivise economic competition and innovation while ensuring respect for individual rights. In contrast, extractive institutions that concentrate power and wealth in the hands of a few people, hinder progress, causing instability and economic stagnation.
This analysis extends to the interaction between institutions and technology. Acemoğlu pointed out that although technology can generate great benefits for society, its impact is highly dependent on the institutional context in which it is adopted. Inclusive institutions facilitate the adoption of technologies that improve productivity and enhance collective well-being, while extractive institutions often limit such benefits to a small elite. This link between institutions, technology and economic development has opened up new perspectives for understanding growth disparities between nations.
In a recent interview he gave to the Economy of Francesco, Acemoğlu emphasised that modern society must make decisive choices on how to use technology, distribute resources and exercise its rights. In an increasingly complex world, the ability to make informed decisions on these issues becomes crucial in defining the future of societies. The interview highlights one of the most significant contributions of his way of thinking: technology and innovation, while being powerful forces for progress, must be guided by collective and responsible choices.
I will probably be wrong, but my feeling is that this Nobel Prize was not awarded for providing definitive answers, but for challenging us to face the big questions of our time and for pushing us to recognise how important, now more than ever, the power of choice is.
Illustration by Niklas Elmehed © Nobel Prize Outreach