Nobel Prize in Economics 2024 and Prospects for Institutional Economics

The 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to D. Acemoglu, S. Johnson and J. Robinson, and was the first prize since 1993 to include a mention of institutions in its rationale. The article discusses the development of research on the relationship between institutions and economic development over the past decades, the contributions of the laureates, the connection with Acemoglu's theory of directed technological change, and the problems and further prospects of the institutional theory of economic development. The main progress has been related to the application of game theory to the analysis of institutions, as well as the use of econometric and other methods to test theoretical hypotheses. As a result, significant changes have occurred in the direction of greater formalization and rigor of institutional analysis. Acemoglu, Johnson, and Robinson have become emblematic of these changes, and a number of their works can be called classic in this regard. Among other things, they proposed a game-theoretic model of the formation and change of political institutions and used the instrumental variables method to demonstrate that institutions cause development, and not vice versa. Acemoglu and his co-authors are often accused of neglecting culture, ideology, the process of creating and disseminating inventions, and of trying to present institutions as the only factor determining all aspects of economic development. Although an analysis of their work paints a more complex picture, this criticism is not unfounded. I show that the theory of directed technological change leads to the conclusion that progress can and should be directed in a direction that is beneficial to society. This means that it depends only on political institutions whether this can be done. The reason for this view lies in the general orientation of institutional development theory to macro-level processes and the long-term perspective. The main challenge facing this line of research is to overcome this attitude and to search for the microfoundations of institutional dynamics and their connection with technological progress.