The number of times the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been given does not match the figures of recipients who have had the esteemed rare privilege of claiming the award. Since 1969 and now, 96 laureates have been honoured out of the 56 times this particular Nobel Prize has been given.

A reason why this happened is because sometimes, winners being recognised must share credits just like what the trio of Daron Acemoglu, Simon Johnson and James A. Robinson had to do this time out. They were able to look into a study on how institutions are formed and affect prosperity and a Nobel Prize Committee believed their thoughts were just right.

Their “Institutions as the Fundamental Cause of Long-Run Growth” paper published in May 2004 reawakened what had been the legacies of colonialism, citing the aftermath of Britain’s age of conquest.

By the end of the 19th century, the British Empire comprised nearly one-quarter of the world’s land surface and more than one-quarter of its total population and Nigeria was one of them, scattered among several colonies. Acemoglu and others drew a picture when they reviewed whether there had been an imbalance in the countries that later gained independence from the empire.

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The research conducted showed some countries had it better than others and these are in the places where the people looked like the colonial master, the way it happened with Australia. Economic prosperity is obvious here compared to Nigeria or other West African societies that didn’t enjoy inclusivity when their colonial masters reigned. This is why the three authors seem to be probing economic institutions alongside their pros and cons.

In their probe, they went back to urbanisation in 1995 against the gross domestic product per capita in the same year. At the time, Nigeria was barely in the median range. This time in the country, there was the instability that comes as a starter pack when under military rule.

A text capturing the mood of the Nobel Prize committee and what made it give out the award talks about the laureates’ model for explaining the circumstances under which political institutions are formed and changed as having three components.

The first is a conflict over how resources are allocated and who holds decision-making power in a society (the elite or the masses). The second is that the masses sometimes have the opportunity to exercise power by mobilising and threatening the ruling elite; power in a society is thus more than the power to make decisions. The third is the commitment problem, which means that the only alternative is for the elite to hand over decision-making power to the populace.

Although published two decades ago, Institutions as the Fundamental Cause of Long-Run Growth appears a test of how the current federal government in Nigeria is coming up with the developmental plans it has drafted.

In the people’s eyes, it’s been taking too long to feel the effect of President Bola Tinubu’s economic reforms. They think it has brought more burden than satisfaction yet they hang in there.

Without the several layers of elitist maneuvering or bureaucracy covering what should have been an evenly distributed wealth in an exceptionally blessed nation, maybe there will be living better than right now when energy costs have been stifling.

All three Daron Acemoglu, Simon Johnson and James A. Robinson have already challenged views on what exactly struggling countries can tweak to lead a smoother growth path than they currently have. It all lies in entrenching inclusivity in processes – when the citizens feel like they belong, then they can contribute, which can hasten the speed of development be it in the rural or urban space.

The book Why Nations Fail: The Origins of Power, Prosperity, and Poverty came much after the prosperity or the lack of it paper was released. It was co-authored by only Acemoglu and Johnson. An excerpt credited only to the former defined the types of economic structures that exist.

We call such institutions, which have opposite properties to those we call inclusive, extractive economic institutions—extractive because such institutions are designed to extract incomes and wealth from one subset of society to benefit a different subset.

The winning formation was unlike the previous year when New York-born Claudia Goldin took the sumptuous 11 million Swedish kronor (₦1.7Billion) for advancing an understanding of women’s labour market outcomes after childbirth.

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Ayodele Johnson

Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.