By Thierry Verdier, Professor of Economics, Associate Chair at the Paris School of Economics, École des Ponts ParisTech (ENPC)

In 2022, according to the World Bank, Denmark's per capita income will be $74,000 (in purchasing power parity terms), while Sierra Leone's will be $1,900. How can we explain such income differences between nations? And how can we explain the fact that even when the poorest countries tend to get richer, they don't catch up with the most prosperous? On October 14, the Nobel Prize in Economics, presented by the Bank of Sweden, was awarded to Daron Acemoglu, Simon Johnson and James A. Robinson, for their work on these issues. Robinson, for their work on these fundamental questions for the discipline of economics. Their contributions, both theoretical and empirical, highlight that an important explanation lies in the central relationship between institutions (property rights, the legal system, political systems, public governance, etc.) and prosperity.

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