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MIT economists Daron Acemoglu and Simon Johnson share Nobel Prize

Along with James Robinson, the professors are honored for work on the relationship between economic growth and political institutions.
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Daron Acemoglu and Simon Johnson
Caption:
Daron Acemoglu (left) and Simon Johnson
Credits:
Credit: Acemoglu, Adam Glanzman; Johnson, Michelle Fiorenza

MIT economists Daron Acemoglu and Simon Johnson PhD ’89, whose work has illuminated the relationship between political systems and economic growth, have been named winners of the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Political scientist James Robinson of the University of Chicago, with whom they have worked closely, also shares the award.

“Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better,” the Swedish Royal Academy of Sciences stated in the Nobel citation. “The laureates’ research helps us understand why.”

The long-term research collaboration between Acemoglu, Johnson, and Robinson, which extends back for more than two decades, has empirically demonstrated that democracies, which hold to the rule of law and provide individual rights, have spurred greater economic activity over the last 500 years.

“I am just amazed and absolutely delighted,” Acemoglu told MIT News this morning, about receiving the Nobel Prize. Separately, Johnson told MIT News he was “surprised and delighted” by the announcement.

MIT President Sally Kornbluth congratulated both professors at an Institute press conference this morning, saying that Acemoglu and Johnson “reflect a kind of MIT ideal” in terms of the excellence and rigor of their work and their commitment to collaboration. Their research, Kornbluth added, represents “a very MIT interest in making a positive impact in the real world.”

In their work, Acemoglu, Johnson, and Robinson make a distinction between “inclusive” political governments, which extend political liberties and property rights as broadly as possible while enforcing laws and providing public infrastructure, with “extractive” political systems, where power is wielded by a small elite.

Overall, the scholars have found, inclusive governments experience the greatest growth in the long run. By contrast, countries with extractive governments either fail to generate broad-based growth or see their growth wither away after short bursts of economic expansion.

More specifically, because economic growth depends heavily on widespread technological innovation, such advances are only sustained when and where countries promote an array of individual rights, including property rights, giving more people the incentive to invent things. Elites may resist innovation, change, and growth to hold on to power, but without the rule of law and a stable set of rights, innovation and growth stall.

“Both political and economic inclusion matter, and they are synergistic,” Acemoglu said during the MIT press conference.

The scholarship of Acemoglu, Johnson, and Robinson has often been historically grounded, using the varying introduction of inclusive institutions, including the rule of law and property rights, to analyze their effects on growth.

As Acemoglu told MIT News, the scholars have used history “as a kind of lab, to understand how different institutional trajectories have different long-term effects on economic growth.”

For his part, Johnson said about the prize, “I hope it encourages people to think carefully about history. History matters.” That does not mean that the past is all-determinative, he added, but rather, it is essential to understand the crucial historical factors that shape the development of nations.

In a related line of research cited by the Swedish Royal Academy of Sciences, Acemoglu, Johnson, and Robinson have helped build models to account for political changes in many countries, analyzing the factors that shape historical transitions of government.

Acemoglu is an Institute Professor at MIT. He has also made notable contributions to labor economics by examining the relationship between skills and wages, and the effects of automation on employment and growth. Additionally, he has published influential papers on the characteristics of industrial networks and their large-scale implications for economies.

A native of Turkey, Acemoglu received his BA in 1989 from the University of York, in England. He earned his master’s degree in 1990 and his PhD in 1992, both from the London School of Economics. He joined the MIT faculty in 1993 and has remained at the Institute ever since. Currently a professor in MIT’s Department of Economics, an affiliate at the MIT Sloan School of Management, and a core member of the Institute for Data, Systems, and Society, Acemoglu has authored or co-authored over 120 peer-reviewed papers and published four books. He has also advised over 60 PhD students at MIT.

“MIT has been a wonderful environment for me,” Acemoglu told MIT News. “It's an intellectually rich place, and an intellectually honest place. I couldn't ask for a better institution.”

Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at MIT Sloan. He has also written extensively about a broad range of additional topics, including development issues, the finance sector and regulation, fiscal policy, and the ways technology can either enhance or restrict broad prosperity.

A native of England, Johnson received his BA in economics and politics from Oxford University, an MA in economics from the University of Manchester, and his PhD in economics from MIT in 1989. From 2007 to 2008, Johnson was chief economist of the International Monetary Fund.

“I think of MIT as my intellectual home,” Johnson told MIT News. “I am immensely grateful to the Institute, which has a special and creative atmosphere of rigorous problem-solving.”

Acemoglu and Robinson first published papers on the topic in 2000. The trio of Acemoglu, Johnson, and Robinson published their first joint study in 2001, an influential paper in the American Economic Review detailing their empirical findings. Acemoglu and Robinson published their first co-authored book on the subject, “Economic Origins of Dictatorship and Democracy,” in 2006.

Acemoglu and Robinson are co-authors of the prominent book “Why Nations Fail,” from 2012, which also synthesized much of the trio’s research about political institutions and growth.

Acemoglu and Robinson’s subsequent book “The Narrow Corridor,” published in 2019, examined the historical development of rights and liberties in nation-states. They make the case that political liberty does not have a universal template, but stems from social struggle. As Acemoglu said in 2019, it comes from the “messy process of society mobilizing, people defending their own liberties, and actively setting constraints on how rules and behaviors are imposed on them.”

Acemoglu and Johnson are co-authors of the 2023 book “Power and Progress: Our 1,000-Year Struggle over Technology and Prosperity,” in which they examine artificial intelligence in light of other historical battles for the economic benefits of technological innovation.

Johnson is also co-author of “13 Bankers” (2010), with James Kwak, an examination of U.S. regulation of the finance sector, and “Jump-Starting America” (2021), co-authored with MIT economist Jonathan Gruber, a call for more investment in scientific research and innovation in the U.S.

Gruber, as head of the MIT Department of Economics, praised both scholars for their accomplishments.

“Daron Acemoglu is the economists’ economist,” Gruber said. “Daron is a throwback as an expert across a broad swath of fields, mastering topics from political economy to macroeconomics to labor economics — and he could have won Nobels in any of them. Yet perhaps Daron’s most lasting contribution is his essential work on how institutions determine economic growth. This work fundamentally changed the field of political economy and will be an enduring legacy that forever shapes our thinking about why nations succeed — and fail. At MIT, we recognize Daron not just as an epic scholar but as an epic colleague. Despite being an Institute Professor who is freed from departmental responsibilities, he teaches many courses every year and advises a huge share of our graduate student body.”

About Johnson, Gruber said: “Simon Johnson is an amazing economist, a terrific co-author, and a wonderful person. No one I know is better at translating the esoteric insights of our field into the type of concise explanations that bring economics to the attention of the public and policymakers. Simon doesn’t just do the fundamental research that changes how the profession thinks about essential issues — he speaks to the hearts and minds of those who need to hear that message.”

Agustin Rayo, dean of MIT’s School of Humanities, Arts, and Social Sciences, home to the Department of Economics, heralded today’s Nobel Prize as well.

“This award is deeply deserved,” Rayo said. “Daron is the sort of economist who shifts the way you see the world. He is an extraordinary example of the transformative work that is generated by MIT's Department of Economics.”

“All of us at MIT Sloan are very proud of Simon Johnson and Daron Acemoglu’s accomplishments,” said Georgia Perakis, the interim John C. Head III Dean of MIT Sloan. “Their work with Professor Robinson is important in understanding prosperity in societies and provides valuable lessons for us all during this time in the world. Their scholarship is a clear example of work that has meaningful impact. I share my heartiest congratulations with both Simon and Daron on this incredible honor.”

Previously, eight people have won the award while serving on the MIT faculty: Paul Samuelson (1970), Franco Modigliani (1985), Robert Solow (1987), Peter Diamond (2010), Bengt Holmström (2016), Abhijit Banerjee and Esther Duflo (2019), and Josh Angrist (2021). Through 2022, 13 MIT alumni have won the Nobel Prize in economics; eight former faculty have also won the award.

Press Mentions

GBH

Prof. Daron Acemoglu and Prof. Simon Johnson, recipients of the 2024 Nobel Prize in economics, join Boston Public Radio to discuss their research examining the role of institutions in creating shared prosperity. “For the longer-term health of the U.S. economy,” says Acemoglu, “there’s probably nothing more important than its institutions. If any president, any politician, any party damages those institutions, that’s the first thing we should focus on.” Johnson adds: “Democracy has to deliver on shared prosperity. Otherwise people get very annoyed and they question the system.”

Times Higher Education

Prof. Simon Johnson, one of the recipients of the 2024 Nobel Prize in economics, speaks with Times Higher Education reporter Jack Grove about his journey from a childhood in Sheffield as the son of a screw manufacturer to studying for his PhD at MIT and serving as chief economist at the International Monetary Fund. Speaking about how to help ensure AI is used to benefit society and workers, Johnson explains: “Big tech doesn’t like us, but we need a plan for this, and the role of economists like us is to get ideas like this out there so they can be hammered out in the policy world.”

CNBC

Prof. Daron Acemoglu, a recipient of the 2024 Nobel Prize in economic sciences, speaks with CNBC about the challenges facing the American economy. Acemoglu notes that in his view the coming economic storm is really “both a challenge and an opportunity,” explains Acemoglu. “I talk about AI, I talk about aging, I talk about the remaking of globalization. All of these things are threats because they are big changes, but they’re also opportunities that we could use in order to make ourselves more productive, workers more productive, workers earn more. In fact, even reduce inequality, but the problem is that we’re not prepared for it.” 

CNBC

Prof. Simon Johnson, who shared the 2024 Nobel Prize in economic sciences with Prof. Daron Acemoglu, speaks with CNBC “Squawk Box” about his reaction to hearing the news that he was a Nobel laureate and his research on the role of strong institutions in shaping economies. “I think going forward we need to strengthen the resilience of our democracy in the United States,” says Johnson. He adds that having a “resilient democracy, a legitimate democracy, a democracy that everyone believes in and adheres to the results of elections, is absolutely fundamental to everything that we’ve been able to build.” 

NPR

Prof. Simon Johnson, a recipient of the 2024 Nobel Prize in economic sciences, joins Planet Money’s The Indicator podcast to discuss his research that demonstrates the importance of strong institutions for a country’s economic growth and prosperity. “Rejecting the result of a free and fair election, encouraging people to attack Congress when it's the process of formally validating that vote - that's not acceptable,” says Johnson. “Those moves - that kinds of actions can absolutely undermine, destroy any democracy. We've seen that many times around the world. It takes a long time to build strong institutions. It doesn't take long to overthrow them if you really put your mind to it.”

WBUR

Prof. Simon Johnson, who along with Prof. Daron Acemoglu has received the 2024 Nobel Prize in economic sciences, speaks with Lynn Jolicoeur, host of WBUR’s All Things Considered, about his Nobel Prize winning research and how new technologies could play into the future of democracy. “My bumper sticker for this whole moment is, ‘more good jobs,’” says Johnson. He notes that along with his colleagues Profs. Daron Acemoglu and David Autor, he is “pushing for ways that we can tap into new technology, the latest technology, including artificial intelligence, to push the development and deployment of technology towards more good jobs. If you can do that, I think you can right the ship of democracy and more people will feel confident in their future.”

Marketplace

Prof. Simon Johnson, a recipient of the 2024 Nobel Prize in economic sciences, speaks with Marketplace host David Brancaccio about his research exploring how institutions shape economies and AI’s potential influence on the workforce. “I think there’s a lot we can do on redirecting technological progress and pushing AI and the innovators around that space towards inventing things that are more useful to people and boost the productivity of particularly people with less education.”

New York Times

Profs. Daron Acemoglu and Simon Johnson PhD '89 have been awarded the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their work explaining the gaps in prosperity between nations and advancing our understanding of inequality, reports Jeanna Smialek for The New York Times. “Reducing the huge differences in income between countries is one of our times’ greatest challenges,” said Jakob Svensson, chairman of the economics prize committee. Thanks to the economists’ “groundbreaking research,” he said, “we have a much deeper understanding of the root causes of why countries fail or succeed.” Acemoglu reacted to winning the prize, noting that: “You dream of having a good career, but this is over and on top of that.” 

Associated Press

The Associated Press highlights commentary from Prof. Daron Acemoglu and Prof. Simon Johnson following the announcement that the economists had been awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their research into “why societies with poor rule of law and exploitative institutions do not generate sustainable growth.”. Acemoglu emphasized: Democracy directly “contributes to economic growth, not easily, not right away, it takes a couple of years and it's a difficult business to make democracy work. But generally, countries that democratize grow faster and they grow the right way, meaning they grow in a way that is more equal, and invest more in education and health, so both political and economic inclusion matter, and they are synergistic.”

Associated Press

AP reporters Daniel Niemann, Mike Corder and Paul Wiseman highlight the work of Profs. Daron Acemoglu and Simon Johnson, who have been honored with the Nobel Prize in economic sciences for their work demonstrating “the importance of societal institutions for a country’s prosperity.” Says Johnson of how AI could impact workers: “AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom.”

Bloomberg

Prof. Simon Johnson, a recipient of the 2024 Nobel Prize in economic sciences, speaks with Bloomberg about his research on the impacts of technology on inequality and the future of democracy. “We have not generated enough new good jobs, jobs where you actually get paid good money and you can live well, and we have got to do better on that,” says Johnson. “Automation is going to happen, like it or not, so you have really got to work harder to generate more science, more technology, deploy that, commercialize that, scale it up and generate more good jobs across the country.” 

NPR

Prof. Daron Acemoglu and Prof. Simon Johnson have been honored with the Nobel Prize in economics sciences for their work tracing “the institutional roots of national prosperity by exploring the vastly different outcomes in former European colonies,” explains Scott Horsley for NPR’s Morning Edition. “Democracies are going through a rough patch," says Acemoglu. "And it is in some sense quite crucial that they reclaim the high ground of better governance, cleaner governance, and delivering sort of the promise of democracy to a broad range of people."

 

The Boston Globe

Boston Globe reporter Alexa Gagosz spotlights the work of Profs. Daron Acemoglu and Simon Johnson, recipients of the 2024 Nobel Prize in economics for their research examining global inequality. MIT President Sally Kornbluth called Acemoglu and Johnson, who first stepped foot on MIT’s campus in 1985 as a graduate student, “prolific and influential scholars” whose work “reflects a very MIT interest in making a positive impact in the real world.” Kornbluth added: “Their historical investigations have a great deal to teach us about how and why real societies fail or thrive. And they [have] both become familiar voices in the news, public intellectuals trying to help us all make sense of a tumultuous world.”

Axios

The Nobel Prize in economics has been awarded to Profs. Daron Acemoglu and Simon Johnson for their work studying the impact of societal institutions on country prosperity,” reports Neil Irwin for Axios. The awarded research uncovers why “some nations prosper while other are mired in poverty,” explains Irwin. “[It helps] explain why, showing that colonial societies built on extraction of wealth became poorer in the long run.”

The Wall Street Journal

Profs. Daron Acemoglu and Simon Johnson have been awarded the Nobel Prize in economic sciences for their research that “advanced the understanding of economic disparities among countries,” reports Paul Hannon and Justin Lahart for The Wall Street Journal. “I’ll be very happy if this prize contributes to having more awareness of the importance of building better institutions, building better democracy,” said Acemoglu. “I think those are urgent challenges for us.”

The Washington Post

The Nobel Prize in economics was awarded to Profs. Daron Acemoglu and Simon Johnson for their “research on prosperity gaps between countries – specifically how European colonization led to some nations being rich while others poor,” reports Rachel Siegel for The Washington Post. Speaking about the inspiration for his research, Johnson noted that questions around which countries became rich, and the extent to which institutions played a role, “were not really central to the economics I learned in graduate school. We had to do a lot of work to convince people institutions actually mattered in a really big way.”

PBS NewsHour

Prof. Simon Johnson, one of the recipients of this year’s Nobel Prize in economics, joins the PBS NewsHour to discuss the inspiration for his research, the role of institutions in economies around the world and how technology could be harnessed to create better jobs for all. Johnson notes that through his work with the MIT Shaping the Future of Work Initiative, he and his colleagues hope to “get more good jobs in the United States and around the world.” He adds that in the past, “we have managed things so that technology delivered benefits for a broad cross-section of society. But that's not what we have done in the past four decades. We need a course-correction, and that's what we're going to work on.”

Financial Times

Prof. Daron Acemoglu and Prof. Simon Johnson are two recipients of the 2024 Nobel Prize in economic sciences for their work “highlighting that institutions set up during colonization have had an enduring impact on economic outcomes in the countries affected, “reports Delphine Strauss for the Financial Times. “Their research also indicates that more economically inclusive and politically democratic systems prove more conducive to technological innovation and long-run growth.” 

CBS

Profs. Daron Acemoglu and Simon Johnson are two of the winners of this year’s Nobel Prize in economic sciences. Johnson joined CBS Boston to discuss his Nobel Prize-winning research and the potential impact of AI. "People are both too optimistic and too pessimistic if they believe AI can do more things than it really can, but they haven't thought through the way in which it could really wipe out middle-skill, middle-education, middle-income jobs,” says Johnson. 

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