Note4Students
From UPSC perspective, the following things are important :
Prelims level: Nobel Prize in Economics
Why in the News?
The Nobel Memorial Prize in Economics for 2024 was awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson for their research into why some nations are more prosperous than others.
What is the Nobel Economics Prize?
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This Year’s Nobel for Economics:
- The 2024 Nobel awardees’ research focused on the role of societal institutions in determining a country’s economic prosperity.
- The laureates distinguished between inclusive institutions, which promote democracy, rule of law, and protection of property rights, and extractive institutions, where power is concentrated and resources are exploited for the benefit of a few.
- Their study explains how inclusive institutions foster long-term economic growth by providing stability and incentives, while extractive institutions undermine growth by discouraging investment and innovation.
- The researchers also explored how European colonization shaped current economic disparities by establishing either inclusive or extractive institutions, with decisions influenced by factors such as mortality risks during colonization.
Significance of the study
- The study highlights the critical role of societal institutions in determining a country’s prosperity.
- It distinguishes between inclusive institutions that foster growth and extractive institutions that hinder it.
- It explains how colonial history shaped modern economic disparities.
- The research offers policy insights for building inclusive institutions to promote long-term prosperity.
- It has global implications for reducing inequality and promoting sustainable development.
PYQ:[2019] The long-sustained image of India as a leader of the oppressed and marginalised nations has disappeared on account of its new found role in the emerging global order.’ Elaborate. |
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