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Great Divergence

Daron Acemoglu

Turkish-American economist (b. 1967), Institute Professor at MIT. Nobel laureate in Economics 2024 (shared with Simon Johnson and James Robinson, “for studies of how institutions are formed and affect prosperity”). Trained at the University of York and the LSE. Among the most prolific economists of his generation; the dominant contemporary figure in the institutional theory of long-run development.

Intellectual program

Section titled “Intellectual program”

Acemoglu’s research program — pursued in close collaboration with James Robinson and, in key papers, Simon Johnson — extends and empiricizes the institutional framework Douglass North developed in the 1980s. The central thesis: long-run cross-country differences in income are caused by differences in political and economic institutions, not by geography, culture, or ignorance of good policy. “Inclusive” institutions (constrained executives, secure property rights, broad political participation, open access to markets) attract investment and innovation and tend to be self-reinforcing through the political coalitions they support. “Extractive” institutions (unconstrained elites who capture the state to prolong their rents) deter investment and innovation and tend to be similarly self-reinforcing. Long-run divergence between countries is the cumulative effect of these institutional differences operating over centuries.

The empirical engine of the program is the Acemoglu-Johnson-Robinson 2001 American Economic Review paper (“The Colonial Origins of Comparative Development”), which uses European settler-mortality differences as an instrumental variable for institutional quality, identifying a large causal effect of institutions on per-capita income (factor-of-7 from a one-standard-deviation institutional improvement). The popular synthesis is Why Nations Fail (2012). The framework has been extended through Economic Origins of Dictatorship and Democracy (2006), The Narrow Corridor (2019, on the precarious balance between state capacity and societal mobilization), and most recently Power and Progress (2023, with Johnson, on technology and labour).

Reception and contestation

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Acemoglu’s program is the dominant institutional-economics framework in development economics and comparative political economy. Within IR/GD debates specifically, the framework underwrites the institutional position and its GD-scale extension. The principal contestations:

  • The settler-mortality instrument. David Albouy 2012 (AER) showed that recoding settler-mortality data substantially weakens or reverses the AJR results. Subsequent debate has been technical and unresolved; identification is more fragile than the original paper suggested.
  • The “no role for geography or culture” stance. Many scholars (Sachs, Diamond, Henrich) argue institutions cannot be cleanly separated from geographic, climatic, and cultural antecedents — and that AJR’s attempt to do so risks making institutions an unmoved mover.
  • The 20th-century catch-up record. South Korea, Taiwan, post-1978 China, and several others have grown rapidly under institutions far from the AJR “inclusive” template. Defenders argue these are catch-up cases and that frontier innovation requires the inclusive form; critics see a moving target.
  • Within-Europe variation. France, Spain, and parts of Central Europe shared with England the medieval-institutional inheritance the AJR framework valorizes, but industrialized later. The framework has trouble explaining within-Europe variation cleanly.

Acemoglu has been an unusually productive and accessible academic public figure, contributing to debates on automation, AI, inequality, democracy, and the future of work. His academic output (more than 100 working papers in many years) is famously large.

Associated positions

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Key works

Section titled “Key works”
  • With S. Johnson and J. Robinson: “The Colonial Origins of Comparative Development” (American Economic Review, 2001).
  • With S. Johnson and J. Robinson: “Reversal of Fortune” (Quarterly Journal of Economics, 2002).
  • With Robinson: Economic Origins of Dictatorship and Democracy (2006).
  • Introduction to Modern Economic Growth (2008) — the standard graduate textbook.
  • With Robinson: Why Nations Fail: The Origins of Power, Prosperity, and Poverty (2012).
  • With Robinson: The Narrow Corridor: States, Societies, and the Fate of Liberty (2019).
  • With Johnson: Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity (2023).