The Nobel Memorial Prize in Economic Sciences has been awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson for their groundbreaking research on the factors that contribute to wealth disparities between nations.

The Royal Swedish Academy of Sciences announced the award on Monday, stressing how the laureates have highlighted the significance of societal institutions in determining a country’s economic success. According to the committee, “Countries with weak laws and institutions that exploit their populations do not achieve growth or positive change.” Their findings provide crucial insights into why some nations thrive while others struggle economically.

Acemoglu and Johnson are both professors at the Massachusetts Institute of Technology (MIT), while Robinson is affiliated with the University of Chicago. Their collective research has shown that the prosperity of a nation is closely tied to the quality of its institutions, governance, and the rule of law. They argue that societies that prioritise fairness and effective governance tend to foster environments conducive to innovation and growth.

The award recognises their contributions to understanding how political and economic institutions impact a country’s development. By identifying the reasons behind economic inequality, their work encourages policymakers to focus on building robust institutions that support sustainable economic growth.

This year's prize highlights the importance of addressing institutional shortcomings to promote development and prosperity worldwide. The research of Acemoglu, Johnson, and Robinson serves as a vital reminder of the role institutions play in shaping a nation’s economic landscape, and it offers valuable lessons for countries looking to improve their economic standing on the global stage.