The Nobel Prize in Economic Sciences was awarded Monday to Daron Acemoglu, Simon Johnson and James A. Robinson for their research on the role of social institutions in shaping economic growth.

Her work provides insights into why countries with weak rule of law and exploitative institutions often fail to achieve sustainable development.

When the Royal Swedish Academy of Sciences announced the award in Stockholm, the three economists “have demonstrated the importance of social institutions for the prosperity of a country.”

Acemoglu and Johnson are professors at the Massachusetts Institute of Technology, while Robinson conducts his research at the University of Chicago.

“Reducing the enormous income differences between countries is one of the great challenges of our time,” said Jakob Svensson, chairman of the Economics Prize Committee.

He said the laureates' research had provided “a much deeper understanding of the root causes of countries' failure or success.”

Acemoglu, 57, heard about his victory while attending a conference in Athens, Greece.

“You never expect something like this,” he told reporters.

Acemoglu said her work underscores the crucial role of democratic institutions in promoting growth.

“By and large, the work we have done promotes democracy,” he said, although “democracy is not a panacea. Implementing democracy is very difficult and elections can sometimes trigger conflicts.”

Acemoglu was asked about the economic rise of countries like China.

He acknowledged that authoritarian regimes may see short-term gains, but added that “these regimes are likely to face greater challenges in achieving long-term sustainable innovation.”

Acemoglu and Robinson are perhaps best known for their 2012 bestseller. Why Nations Fail: The Origins of Power, Wealth, and Poverty.

In it, they argue that human-made institutions, not geography or culture, are the main drivers of economic success or failure.

One of the key examples of her research is the comparison of Nogales, a city divided by the US-Mexico border.

On the U.S. side in Arizona, residents generally enjoy better education, wealth, and governance, while residents of Sonora, Mexico, face greater poverty and corruption.

The economists said the difference lies in institutional structures, with the US providing stronger protection of property rights and allowing more political participation.

Acemoglu expressed concerns about the weakening of democratic institutions in Western countries, particularly in the United States and Europe.

“Democracies perform poorly when the population feels they are not achieving their goals,” he said, emphasizing the need for these systems to regain the public’s trust.

“This is a time when democracies are going through a difficult phase. In some ways it is crucial that they regain the edge of better governance.”

The prize, officially known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 by the Central Bank of Sweden in honor of the founder of the original Nobel Prizes.

Although the Economics Prize is not technically one of the original five prizes, it is awarded each year along with the others on December 10, the anniversary of Alfred Nobel's death.

The awards for peace, physics, literature, chemistry and medicine were announced last week.

On Friday, the Nobel Peace Prize was awarded to Nihon Hidankyo, a Japanese organization of survivors of the US atomic bombings of Hiroshima and Nagasaki, in recognition of their decades-long commitment against nuclear weapons.

John Hopfield and Geoffrey Hinton have been awarded the 2024 Nobel Prize in Physics for their contributions to machine learning.

The South Korean author Han Kang received the Nobel Prize for Literature. The Nobel Committee recognized her for “her intense poetic prose that grapples with historical trauma and exposes the fragility of human life.”

The Nobel Prize in Chemistry went to an American scientist, David Baker, who was honored along with Demis Hassabis and John Jumper for their groundbreaking work in predicting and designing protein structures, the essential building blocks of life.

American researchers Victor Ambros and Gary Ruvkun were awarded the Nobel Prize in Physiology or Medicine.

This article contains reporting from The Associated Press