Two MIT economists were among those awarded the Nobel Prize in economics Monday for their decades of work illuminating the relationship between political institutions and economic prosperity.

“Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better,” the release from the Royal Swedish Academy of Sciences stated. “The laureates’ research helps us understand why.”

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 was awarded to three collaborators for their research, MIT economics professors Daron Acemoglu and Simon Johnson and the University of Chicago professor James Robinson.

The prize recognized the researcher’s work exploring hundreds of years of countries’ histories to demonstrate how democracies which uphold rule of law and individual and property rights spur economic growth.

“The basic finding that we have in our historical work is that, yes, you can have episodes of growth under different arrangements,” said Johnson at an MIT press conference Monday morning, “but if you want to sustain that growth over time, it’s much stronger, much more robust if you could move towards that kind of inclusive participation.”

Inclusive economic institutions have “secure property rights” and “education, public infrastructure, the right kind of regulation” and other measures upholding equal opportunity, Acemoglu said. Inclusive political institutions, he noted, are designed by a framework in which people’s voice and power are distributed and “not monopolized by one group, one person, one party.”

The research looked into different countries colonized by Europeans and the change in their institutions, the Nobel release detailed, exploring those that exploited indigenous populations and extracted resources and those that formed inclusive political and economic systems to the benefit of the European migrants.

“It’s difficult business to make democracy work, but generally, countries that democratize grow faster and they grow the more right way, meaning they grow in a way that’s more equal, invest more in education and health,” said Acemoglu. “So both political and economic inclusion matter, and they are synergistic.”

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The economists spoke to how they heard the news Monday, with Acemoglu saying he heard on the balcony of his hotel room in Athens and Johnson recalling getting a text, “which feels not inappropriate, actually, for 2024.”

Acemoglu called it an “amazing day” and the culmination of a “long journey” starting with the topics that initially drew him to economics.

“Reducing the vast differences in income between countries is one of our time’s greatest challenges,” said Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences. “The laureates have demonstrated the importance of societal institutions for achieving this.”