The Nobel Prize in Economics was awarded today to a trio of distinguished economists—James Robinson from the University of Chicago, and Duran Acemoglu and Simon Johnson from MIT—for their groundbreaking research on global inequality and the long-term impacts of colonialism on prosperity. Their work delves into how different colonial practices have shaped the economic trajectories of nations, revealing stark disparities in wealth and institutional development.

In an interview following the announcement, Simon Johnson recounted the moment he learned of his Nobel win, expressing disbelief upon seeing the news on his phone. He emphasized that their research highlights the critical role of institutions established during colonial times, which have lasting effects on contemporary economic conditions.

Johnson explained that the prosperity gap between nations, particularly those formerly colonized by Europeans, stems from the varying approaches taken by colonial authorities. In some regions, European settlers were encouraged to establish communities, leading to the creation of inclusive institutions that fostered economic growth. Conversely, in areas where colonial powers focused on extraction and control, exploitative institutions were established, resulting in enduring economic challenges.

Reflecting on the current global landscape, Johnson noted the rising threats to democratic institutions amid a surge in populism and authoritarianism. He pointed out that the failure to achieve shared prosperity over the past four decades has contributed to this instability, echoing concerns about the future of democracy and economic equity worldwide.