Acemoglu, Johnson, and Robinson's 2024 Economics Nobel research argues that long-run national prosperity is primarily determined by which factor?
- Geographic location — proximity to trade routes and temperate climate
- Natural resource abundance — countries with minerals develop faster
- Quality of institutions — inclusive vs extractive institutional design
- Cultural factors — trust and social capital within communities
Answer: The quality of institutions — particularly whether they are inclusive (protecting property and political rights) or extractive (concentrating wealth in a small elite)
The three economists used colonial history as a natural experiment to show that institutional quality — not geography or culture — is the main driver of national wealth. Where colonisers settled in large numbers and built inclusive institutions, countries tended to prosper; where extractive institutions were established to concentrate wealth, those patterns persisted for generations after independence. Their book Why Nations Fail (2012) brought these ideas to a general audience.