The 2024 Nobel Prize in Economics: Explained（原声文稿）

the Nobel Prize in Economics, is an annual prize awarded to economists different name is because it was not one of the original prizes by the Swedish central bank which funds the prize money only way to get there was to get a sovereign central bank to foot the bill.

capacity to massively improve the lives of billions of people and disciplines do if they're implemented correctly.

make the world a better place than the winners of this year's prize.

Darren Asamoglu, Simon Johnson and James A. Robinson.

genuinely some of the most influential economists in the world.

of what they won their prize for, but their work, as well as the work of Simon Johnson, goes beyond that.

the world, and have also been used to make sure some growing wealthier as a whole, the ratio is not changing, laureates have presented a compelling solution to in their collective sense on a surface level, like why some countries that are completely countries that are literally sitting on top of gold mines.

If all that wasn't countries and poor countries.

Places like Venezuela, country with very few natural resources, has a GDP per capita almost countries are largely some of the poorest nations in the landlocked countries are some of the richest places in the world, economic success or failure seemed pretty elusive until this year's separated wealthy nations from poor nations, it was instead reliability of those countries' institutions.

At its participants feel compelled to create value as large as central banks and national treasuries, all the way down to local media, and even individual public servants.

If an economy effective institutions, then its people, potential investors, form they take won't be yanked away from them.

degree that would give them access to a skill profession like reputable institution, there are bodies in place to require that degree to there are fair and impartial courts to enforce contracts.

contracts just go to whoever has the best government connections investment into obtaining those skills in the first place.

standards means that insurance companies will have more employs people, who can pay taxes to an effective tax agency to fund services like a government department that issues licenses.

oversimplified example, but the core idea is the same.

knowledge that if they efficiently do their make sure they can trade that work in for everything else they'll need.

really well then the economy will be richer.

true across basically every economy in the world today.

country that has good, fair and reliable institutions.

of a rich country that has stayed rich without these institutions.

the first people to recognise this correlation.

But correlation doesn't equal causation.

have good institutions because good institutions are expensive.

and financial systems employing well-qualified and competent managers are all kind of expensive.

operate these institutions to just move to rich countries where they global phenomenon most commonly referred to as Braindrain.

just been able to afford good institutions.

through history and tracing the scars of colonialism.

laureates found interesting patterns amongst former colonial regions.

before colonialism were the poorest after colonialism.

primarily determined by how arable the land was and if it had natural resources. Not too dissimilar to the assumptions of today.

had to establish institutions that would suppress the existing subservient labour force to help them with extracting resources.

colonisers, they had to do a lot of the work themselves.

taking advantage of the existing population.

of the same institutions that were all about controlling people.

rather than productive development.

Now back 400 years ago that was value creation rather than value extraction.

It also didn't be threatening to the colonial empires that didn't have to go up against a they had to provide their own labour force through colonial settlers, supported by slave or convict labour imported from elsewhere.

Australia, had to support these independent operations colonies had to encourage people to travel from Europe to make a life there, clearly not afforded to the indigenous inhabitants prosperous before colonialism just inherited these institutions their own homes after claiming independence which means that that just because the nations that formed in better and tragically there is of course still a divide between these of the clearest examples of this playing out in the real world of two cities.

The city of Nagarles is divided by a fence that global standards, a long life expectancy, good access to education, and of course, relatively corruption free system of rules and regulations, representative governments or the way up from the local mayor to the president.

and has significant issues with organized crime and corruption.

geography, the same climate, and even the same heritage.

operating under the institutions of the USA or the institutions of Mexico.

contributed to institutions that are less representative even to this day.

laureates to back up the idea that good institutions do create rich lot of background research just to prove a causal relationship, Yep, but with stakes this high, it was essential.

institutions would be like telling a homeless person to just buy a home.

recommendations to improve a bad situation.

that good policy can be recommended to support those institutions. The problem is, that's easier said than done.

wealthier with no tradeoffs then obviously every economy would do it.

their people's best interest in mind, running these institutions takes a lot of skills and experience. The first part is obviously the biggest hurdle for a lot of economies.

to favour them at the expense of their people and they don't want to give that up unless they can be sure that their economic situation would improve.

Now oftentimes, it actually could by giving back a bit of control.

Institutions almost always run better when they're beholden to the people.

state, but there's no guarantee that those people would keep their positions of power and wealth if they introduce fairer systems.

neither side can trust the other to make the first move.

institutions was through the peaceful non-violent transfer and are just generally more trouble on their worth.

work done over decades, empirically showing that fairer was huge.

And before the work of these men, benevolent dictatorship.

Now obviously it's incredibly hard to wholeheartedly recommend their book Why Nations Fail.

some random guy on the internet, it's written by two Nobel Prize straight on exactly what has been holding Africa back from the economic available on Spotify and most other streaming services.