STOCKHOLM: 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 colonisers, the three have demonstrated a relationship between societal institutions and prosperity, the jury said.

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

Acemoglu, 57, and Johnson, 61, are professors at the Massachusetts Institute of Technology (MIT).

Robinson, 64, is a professor at the University of Chicago.

The jury highlighted the laureates’ work in illuminating how political and economic institutions play a role in explaining why some countries prosper while others do not.

“Although the poorer countries are, of course, becoming richer, they’re not closing the gap,” Jan Teorell, a professor of political science and member of the award committee, told a press conference.

“Acemoglu, Johnson and Robinson have shown that a large part of this income gap is due to differences in economic and political institutions in society,” Teorell said.

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. “The decisive difference is thus not geography or culture, but institutions,” 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 laureates’ research also helped explain why some countries become trapped in a situation of “low economic growth.”—AFP