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STOCKHOLM, Sweden â The Nobel prize in economics was awarded on Monday to Turkish-American Daron Acemoglu and British-Americans Simon Johnson and James Robinson for research into wealth inequality between nations.
By examining the various political and economic systems introduced by European colonizers, the three have demonstrated a relationship between societal institutions and prosperity, the jury said.
âReducing the vast differences in income between countries is one of our timeâs greatest challenges,â Jakob Svensson, chair of the Committee for the Prize in Economic Sciences, said in a statement.
âThe laureates have demonstrated the importance of societal institutions for achieving this,â Svensson added.
Acemoglu, 57, and Johnson, 61, are professorsĚý at the Massachusetts Institute of Technology (MIT).
Robinson, 64, is a professor at the University of Chicago.
The jury highlighted the laureatesâ work in illuminating how political and economic institutions play a role in explaining why some countries prosper while others do not.
âAlthough the poorer countries are, of course, becoming richer, theyâre not closing the gap,â Jan Teorell, a professor of political science and member of the award committee, told a press conference.
âAcemoglu, Johnson and Robinson have shown that a large part of this income gap is due to differences in economic and political institutions in society,â Teorell said.
âInclusive institutionsâ
In a statement explaining the prize, the jury noted the example of the city of Nogales, which is divided by the US-Mexican border, where residents on the US side of the city tend to be better off.
âThe decisive difference is thus not geography or culture, but institutions,â the Royal Swedish Academy of Sciences said.
The US economic system provides residents north of the border greater opportunities to choose their education and profession, and they are part of the US political system, which gives them broad political rights.
By contrast, south of the border, residents live under other economic conditions, and the political system limits their potential to influence legislation.
In addition, the jury noted that the laureatesâ research also helped explain why some countries become trapped in a situation of âlow economic growth.â
The Academy said differences between nations could be traced back to the institutions built up by colonial powers.
It said that âin some colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonizers,â which would provide only âshort-term gains for the people in powerâ.
In others, colonial powers âbuilt inclusive political and economic systems,â which would âcreate long-term benefits for everyone.â
So âinstitutions that were created to exploit the masses are bad for long-run growth.â
Conversely, âones that establish fundamental economic freedoms and the rule of law are good for it.â
Acemoglu, who was âdelightedâ to receive the award, told reporters that the âwork that we had done favors democracy.â
âSubstantial gainâ
Speaking via telephone from Athens as the award was announced in Stockholm, Acemoglu said that the economies of âcountries that democratise, starting from a non-democratic regimeâĚý grow faster than non-democratic regimes.
âAnd itâs a substantial gain,â Acemoglu said.
He acknowledged nonetheless that âdemocracy is not a panaceaâ and âintroducing democracy is very hardâ.
Acemoglu, the author of several best-sellers including âWhy Nations Fail: The Origins of Power, Prosperity, and Povertyâ, was considered a top name for the prize this year.
The economics prize wraps up this yearâs Nobel season, which honored achievements in artificial intelligence for the physics and chemistry prizes, while the Peace Prize went to Japanese group Nihon Hidankyo, committed to fighting nuclear weapons.
South Koreaâs Han Kang won the literature prize â the only woman laureate this year â while the medicine prize lauded discoveries in understanding gene regulation.
The Nobel Prizes consist of a diploma, a gold medal and a $1 million reward and winners will receive their awards at ceremonies in Stockholm and Oslo on December 10, the anniversary of the 1896 death of scientist and prize creator Alfred Nobel.