The VoxDev Editorial Board would like to congratulate the 2024 economic sciences laureates, Daron Acemoglu, Simon Johnson and James Robinson. All three laureates have made significant contributions to both development economics and political economy.
Acemoglu, Johnson and Robinson’s work documents the central role that institutions play in the process of economic development and provides valuable frameworks for thinking about social, political, and economic change. This paved the way for applied work on a number of topics that both deepen our understanding of economic development and offer critical insights for policymakers in low- and middle-income countries.
Our previous post about the 2019 Nobel Prize in Economics recognised the work of Esther Duflo, Abhijit Banerjee and Michael Kremer in bringing both rigour and a deep commitment to contextual engagement to the forefront of development economics. The work of this year’s laureates set the stage for the methods of the credibility revolution to be applied to a wide range of new policy-relevant questions outside of traditional economics, but central to understanding economic development.
Much mainstream economic research now focuses on politicians, political parties, bureaucrats, state effectiveness, and state accountability. By connecting institutions directly to economic development, Acemoglu, Johnson and Robinson encouraged research into these important political economy questions.This is also reflected in a large set of research initiatives that now focus on these issues, such as the IGC’s State Capabilites Programme, Evidence in Governance and Politics (EGAP), JPAL Governance Initiative (GI), and a number of similar initiatives that bring economists and political scientists together to focus on economic development.
One particularly exciting strand of research focuses on the process of openness and democratisation, exploring how, and why, we should aim to foster inclusive political institutions:
- Support for democracy and the future of democratic institutions
- Democracy and economic growth: New evidence
- Democracy and infrastructure investment in Indonesia
- How democracy causes growth: Evidence from Indonesia
In their work, Acemoglu, Johnson, and Robinson also explore why democracy emerges in the first place. “The Narrow Corridor” (by Acemoglu and Robinson) argues that, for elites, democracy is a way that they can credibly commit to non-elites over a long horizon. Research on VoxDev has highlighted the multiple benefits of making states more accountable to their citizens:
- Public disclosure as a political incentive: Evidence from municipal elections in India
- Accountability institutions, political capture and selection into politics
- Improving democratic accountability in Sierra Leone
“The Narrow Corridor” requires both accountability and state capacity, which has also been a recurrent theme of research on VoxDev:
- State capacity and the development of the US
- Building trust in state institutions: Evidence from Pakistan
- Taxation, civic culture and state capacity
- How not to build a state: Evidence from Colombia
Another valuable aspect of Acemoglu, Johnson, and Robinson’s work on institutions is their early recognition of the importance of political incentives. This is receiving growing recognition within economics and is particularly relevant for ensuring the evidence generated by development economists translates into policy. Political incentives matter: governments will implement effective interventions only when they make political sense.
- How should economic researchers give policy advice?
- School reform in Liberia improved test scores but lost votes by antagonising teachers
- When does politics work for development?
In practice, policymakers cannot simply decide to have “good institutions”, as institutions are persistent and difficult to change. To document this persistence and explore how good institutions arise, this year’s laureates, particularly James A. Robinson, have pioneered new methods that take history and politics seriously and incorporate them into fieldwork. A generation of researchers have built on this tradition to shed light on a range of topics featured on VoxDev:
- Lasting effects of colonial-era resource exploitation in Congo: Concessions, violence, and indirect rule
- Historical experiences and demand for health: The legacy of colonial medical campaigns in Central Africa:
- Historical legacies and African development
- Drawing the line: The short- and long-term consequences of partitioning India
Recent experimental research has also explored how policymakers can strengthen local institutions, with work on VoxDev highlighting the mixed results of these interventions thus far:
- Unintended voter polarisation by political elites: Experimental evidence from Turkey
- The importance of trust in health systems during crises: Evidence from Sierra Leone
- Skill versus voice in local development
- Can low-capacity governments work with local leaders to increase tax revenues? Evidence from the Democratic Republic of Congo
- Making policies matter
Next week’s podcast will discuss how we can identify critical junctures when institutions can change (subscribe wherever you get your podcasts). This is one exciting way in which the work of AJR will continue to shape future research.
As an editorial board, we wanted to highlight some of the salient ways in which Acemoglu, Johnson, and Robinson have left a major impact on the discipline. One indicator of their mark on economics is the “Institutions and Political Economy” section of our website. In 2024 alone, VoxDev articles on this topic have been read over 38000 times. We now have 213 articles and podcasts covering research in this area, which has undoubtedly been shaped by their broadening of political economy’s focus, scholarship and respectability.
For those interested in a wide-ranging discussion of political economy and development, check out our VoxDev podcast with James Robinson, our most listened to episode from last year.