Nobel Economics Laureates: "Korea is a Model Case of Desirable Economic Development" (Comprehensive)

Daron Acemoglu, Simon Johnson, James Robinson Win Nobel Prize in Economics
Study on Global Wealth Gap Comparing South Korea's Success and North Korea's Failure
Koreanist Economists Cite South Korea as a Model of Economic Development

This year's Nobel Prize in Economics was awarded to three individuals: Daron Acemoglu (57), Simon Johnson (61), and James A. Robinson (64), who analyzed the causes of success and failure of countries through wealth disparities between nations. (Photo by Nobel Committee)

This year's Nobel Prize in Economics was awarded to three individuals: Daron Acemoglu (57), Simon Johnson (61), and James A. Robinson (64), who analyzed the causes of national success and failure through wealth disparities between countries. In their research on international inequality, they paid close attention to South Korea's successful economic development, establishing a strong connection with Korea and earning them the reputation of being 'pro-Korea scholars.'

Research on Reducing Wealth Gaps Between Countries

On the 14th (local time), the Royal Swedish Academy of Sciences announced that it awarded the Nobel Prize in Economics to them in recognition of their "research on how institutions are formed and how they affect (economic) prosperity." Jakob Svensson, Chair of the Royal Academy's Prize Committee in Economic Sciences, stated, "Reducing income differences between countries is one of the greatest challenges of our time," and "the laureates demonstrated the importance of social institutions in achieving this."

Acemoglu is a professor in the Department of Economics at the Massachusetts Institute of Technology (MIT), Johnson is a professor at the MIT Sloan School of Management, and Robinson is a professor in the Department of Political Science at the University of Chicago.

They focused on the fact that the economic outcomes of countries once colonized by European nations varied depending on the institutions introduced during the colonial era. Countries that were poor during the colonial period but adopted inclusive institutions gradually accumulated wealth, while those that did not remained poor. They argued that for a country to succeed economically, inclusive institutions must be supported.

Professors Acemoglu and Robinson are also well-known domestically as authors of books such as Why Nations Fail. This book identifies social institutions as the key factors determining a nation's success or failure. It particularly emphasizes the importance of political choices by using South Korea and North Korea as examples.

South Korea chose inclusive economic institutions, whereas North Korea insisted on exploitative economic institutions, leading to the country's failure. This book has been cited multiple times in domestic political circles. During the 2022 presidential election, Yoon Suk-yeol, then the People Power Party candidate and now president, listed it among the "books of life or books recommended for young people," alongside Milton Friedman's Free to Choose and John Stuart Mill's On Liberty.

High Praise for South Korea’s Economic Development Amid Difficult Circumstances

After receiving the Nobel Prize, Professor Acemoglu introduced in an online press conference hosted by MIT, "Before the division, South and North Korea were at similar levels, but over time, under different institutions, the economic gap widened more than tenfold." He noted that South Korea's development was not easily achieved, stating, "The democratization process in Korea was very difficult, but after democratization, Korea increased its growth rate and achieved growth in a healthier way."

Professor Johnson also commented on Korea's economic development during the press conference, saying, "It was not an easy journey, and although there are still issues today, the Korean economy is in a much better state and has achieved remarkable accomplishments compared to what other countries have achieved."

Professor Johnson is known to have a Korean-American wife. In a conversation last year with economist Tyler Cowen, he said, "Since my wife's parents were born in Korea, Korea is one of my favorite countries," adding, "I have had many conversations with them, thought a lot about Korea, and also talked extensively with Korean economists." His 2011 book 13 Bankers was co-authored with his brother-in-law James Kwak (Korean name Kwak Yushin).

Professor Son Jongchil of Hankuk University of Foreign Studies' Department of Economics said, "Professor Acemoglu is an outstanding economist who could have received the Nobel Prize at any time," and praised him for "demonstrating that when inclusive institutions are established in human history, it leads to long-term and sustainable growth." He added, "Professor Acemoglu graduated from an undergraduate program in Turkey and has an excellent intellectual foundation for viewing economics from historical perspectives including the Middle East, Europe, and Africa."

Meanwhile, immediately after the award announcement, in an interview with the Associated Press, the laureates expressed serious concerns about former U.S. President Donald Trump, who refused to accept the 2020 election results, calling it "an act of rejecting inclusive institutions." Professor Robinson, in a phone interview with the AP, pointed out, "There has clearly been an attack on this country's inclusive institutions," identifying former President Trump. He said, "There was a presidential candidate who refused to accept defeat in the last election. Former President Trump rejected the democratic rules of citizens," emphasizing, "Of course, it is concerning. I am a worried citizen."

Professor Johnson also noted that by refusing to acknowledge his election defeat, former President Trump has put pressure on the institutions established in the United States. Johnson said, "I think that (refusal to accept the election) is the greatest concern I have witnessed in the industrialized world," adding, "The November 5 election is the most severe stress test for American democracy."