The economists Daron Acemoglu and Simon Johnson from the Massachusetts Institute of Technology, along with James Robinson from the University of Chicago, were awarded the 2024 Nobel prize for economics. They earned this accreditation for their research into what drives long-term economic advancement, with an emphasis on the impact of institutions. Their work analyses the wealth disparities among nations, and as observed by the Nobel committee, the world’s wealthiest 20% are approximately 30 times richer than the poorest 20%.
In highlighting their findings, the scholars drew attention to the contrasting fortunes of the prosperous Nogales in Arizona against its less affluent counterpart across the Mexican border. These two parts of the same city are starkly delineated by a fence, with one being economically and politically secure and the other plagued by corruption and crime. It’s become clear that institutional structures indeed carry weight.
As time advances, these institutions come head to head with emerging challenges; namely, Nogales has become a hotbed for intense immigration debates in the US.
The professors’ broader studies hinge on historical data that reveals countries colonised by settlers who put in place democratic and inclusive institutions fared better than those driven solely by wealth exploitation. In terms of economic progress, the key elements were identified as investment, innovation, property rights, and a reliable legal system.
The British left behind laws and institutions in Ireland, however, its economic growth stagnated until the 1960s. Consistent political stability, a robust legal system, and a well-formulated educational policy have since facilitated Ireland in establishing a modern economy.
Although, it’s important to note that these institutions require constant adaptation, where Ireland’s complacency may have posed a threat. The outcome of governance, planning, and legal procedures often results in ineffective decisions and delays in necessary investments.