Why are some countries so rich? Economics Nobel awarded for study of inequality

Why are some nations wealthier than others? The 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to three researchers who have helped to shed light on this fundamental question.
The income gap between the richest and poorest countries in the world has been widely documented. But Daron Acemoglu and Simon Johnson, both at the Massachusetts Institute of Technology in Cambridge, and James Robinson at the University of Chicago in Illinois studied why these inequalities persist.
The three economists, who will share the 11 million Swedish kronor (US$1 million) prize for their findings, researched the impact of European colonization on various countries’ economies.
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“They looked specifically at the history of European colonialism and the contrast in the fortunes of countries such as the United States or Australia versus countries in sub-Saharan Africa or South Asia,” says Diane Coyle, an economist at the University of Cambridge, UK. “Their work has had a profound impact on how people think about economic development.”
In countries that were already rich and in places where European settlers did not survive well because of illnesses or the climate, “colonial institutions were extractive”, Coyle says. “In contrast, in countries that were poorer to start with or had better climates, Europeans instead built more-inclusive institutions similar to their own countries.”
The laureates demonstrated that “the places that were, relatively speaking, the richest at their time of colonization are now among the poorest”, a spokesperson for the Royal Swedish Academy of Sciences in Stockholm said in a statement.
“When Europeans colonised large parts of the world, the existing institutions sometimes changed dramatically, but not in the same way everywhere. In some colonies, the purpose was to exploit the Indigenous population and extract natural resources to benefit the colonisers. In other cases, the colonisers built inclusive political and economic systems,” according to the academy’s statement.
Kate Pickett, who studies inequality at the University of York, UK, says it is important that the Nobel committee has recognized “researchers who are focused on the root causes of inequalities, showing that economic growth isn’t always important for countries, if it is exploitative and extractive”.
Speaking by telephone at the Nobel prize announcement Acemoglu said he was “surprised and shocked” to have received the call. “You dream of having a good career, but this is over and on top of that. So, it’s a great surprise, I’m honoured.”
Women are under-represented in economics globally
Acemoglu is only the second person born in Turkey to win a science, medicine or economics Nobel, after Aziz Sancar, who shared the chemistry prize in 2015 with Tomas Lindahl and Paul L. Modrich for studies of DNA repair.
Most of this year’s Nobels, except the literature and peace prizes, have gone to men. “Let’s hope it is a one-year blip,” Coyle says. “In recent years, there have been more women winners [in economics]. If this were to be the start of a reversal, that would be concerning.”
“It looks as if long-standing inequalities in women’s opportunities are still being reflected in the distribution of the Nobel prizes,” says Pickett. “Let’s hope in the future we see that change and we see an equal number of women honoured.”