The Nobel Prize Award Ceremony took place on October 14, 2024. The Royal Swedish Academy of Sciences awarded the 2024 Nobel Prize in Economics to Daron Acemoğlu, Simon Johnson, and James A. Robinson for their work on nations transforming into welfare societies.
As the third Turkish person to win a Nobel Prize, following Aziz Sancar in chemistry and Orhan Pamuk in literature, the news of Daron Acemoğlu's achievement resulted in great happiness and pride throughout Türkiye.
It is important to note that this wasn’t the first time the public had heard of Acemoğlu. Prior to his recent success, the public had heard of Acemoğlu in the national elections in 2023. Kılıçdaroğlu met with Acemoğlu on October 11, 2022, where they reportedly exchanged ideas and possible paths that can be taken to improve the state of the Turkish economy in order to help the CHP (Republican People's Party) in the coming election. Although CHP did not win the elections, Kılıçdaroğlu's vision has nevertheless been applauded on X. In fact, rumors are going around that if CHP had won, Acemoğlu would have become the minister of finance.
However, there is still a major part of the public hearing of Acemoğlu for the first time. So, who is Daron Acemoğlu?
Acemoğlu was born in 1967 to an Armenian family living in Istanbul. Acemoğlu’s dad, Kevork Acemoğlu, who passed away in 1988, was one of the well-renowned trade law experts of Türkiye. His mom, Irma Acemoğlu, passed away in 1991 and was one of the old headmasters of Kadıköy Aramyan Uncuyan School, while also being a poet and literary figure.
After completing Galatasaray High School, one of the most prestigious public schools in Türkiye, in 1989, he earned a bachelor's degree in economics from the University of York in England, a master's degree in mathematical economics and econometrics from the London School of Economics in 1990, and a PhD in economics from the London School of Economics in 1992. Since 1993, he has been working as an economics professor at the Massachusetts Institute of Technology (MIT).
Acemoğlu is known for his work in political economy. He has co-authored multiple papers with Simon Johnson and James A. Robinson, with whom he has been working for a long time. Acemoğlu and Robinson wrote the books "The Economic Origins of Dictatorship and Democracy" (2006) and "Why Nations Fail" (2012). The book "Why Nations Fail" (2012) essentially argues that for a poor society to improve its economic situation, it needs to undergo a political transformation. Two economists argued that ordinary citizens should attain political power, which has proven to be successful as seen in examples like France, Japan, Botswana, and the USA.
In one of his old interviews, Daron Acemoğlu stated that he started to gain interest in research areas such as “economic growth relationship between democracy and political organizations and dictatorship oppression” during his teenage years, “growing up in a country that has recently suffered from a coup.”
Acemoğlu is one of the most cited economists of our time. Even before the Nobel, among the numerous awards he has received is the John Bates Clark Medal awarded by the American Economic Association to economists under the age of forty who have made a significant contribution to economic thought and knowledge. According to The Chronicle of Higher Education, it is widely regarded as one of the field's most prestigious awards, second only to the Nobel Memorial Prize in Economic Sciences. Many of the recipients of the John Bates Clark Medal went on to receive the Nobel Prizes in their later careers, like Acemoğlu. While on the topic of Nobel Prizes, how did Acemoğlu and his other two colleagues win the latest Nobel Prize in economics?
In their work, the three economists inferred that the composition of institutions determines the process of national wealth, which they concluded based on comparisons of nations with varying geographic and economic features.
Acemoglu, Johnson, and Robinson's work advances innovative studies of factors influencing a nation's long-term economic viability. Their empirical study highlights how crucial the kinds of political and economic structures established during colonization are. Their theoretical work identifies some of the circumstances that make reforming colonial institutions possible and helps to explain why it is so challenging. The work of the laureates is having a decisive impact on ongoing research in both economics and political science. Their observations on how welfare is impacted by institutions demonstrate the importance of advancing inclusive institutions and democracy as means of accelerating economic growth.
The three economists' explanation implies that inclusive institutions created for the long-term advantage of European immigrants ultimately led to more prosperous societies in the long run. However, they found that in countries where the aim was to exploit the Indigenous population and extract resources for the colonizers’ benefit, the impact has been detrimental and resulted in far poorer societies, leaving some countries trapped in low economic growth cycles.
An example of the research that attracted the attention of the judges covered the contrasting fortunes of Mexico and the US since colonization. Spain used repression in the 16th century to plunder Mexico’s Aztec empire, whereas the less densely populated land to the north attracted more settlers to what became the US, leading to a more democratic system of government. Although during the colonization period, the US was more prosperous than the region that would become Mexico, the US is now wealthier.
The academics did note that if a nation is able to "break free of its inherited institutions to establish democracy and the rule of law, the effects of colonization may be reversed." In the long run, these changes also lead to reduced poverty.”
Jakob Svensson, the chair of the academy's economics award committee, commented on the research, stating, "Closing the income gap between countries is one of today's biggest challenges. Thanks to the groundbreaking research, of Daron Acemoğlu, Simon Johnson, and James A. Robinson, we have a better understanding of why some countries succeed and others don't."
A statement from the Nobel Committee follows: "Societies with weak rule of law and institutions that abuse the population do not lead to growth or positive change. The research of the award winners helps us understand why."
Acemoğlu, speaking at a press conference after being named one of the winners of the prize, said: “Rather than asking whether colonialism is good or bad, we note that different colonial strategies have led to different institutional patterns that have persisted over time. Broadly speaking, the work we have done favors democracy.”
His work inspires debate, informs policies, and raises critical questions about the path forward for nations grappling with economic challenges. It is without a doubt that the world will continue to hear his name for a long time.
Edited by: Melisa Altintas