Nobel economics prize goes to 3 economists who found that freer societies are more likely to prosper

STOCKHOLM (AP) — The Nobel memorial prize in economics was awarded Monday to three economists who have studied why some countries are rich and others poor and have documented that freer, open societies are more likely to prosper.

The work by Daron Acemoglu, Simon Johnson and James A. Robinson “demonstrated the importance of societal institutions for a country’s prosperity,” the Nobel committee of the Royal Swedish Academy of Sciences said at the announcement in Stockholm.

Acemoglu and Johnson work at the Massachusetts Institute of Technology, while Robinson does his research at the University of Chicago.

Jakob Svensson, chair of the Committee for the Prize in Economic Sciences, said their analysis has provided "a much deeper understanding of the root causes of why countries fail or succeed.”

Reached by the academy in Athens, Greece, where he was to speak at a conference, the Turkish-born Acemoglu, 57, said he was astonished by the award.

“You never expect something like this," he said.

Acemoglu said the research honored by the prize underscores the value of democratic institutions.

“I think broadly speaking the work that we have done favors democracy,” he said in a telephone call with the Nobel committee and reporters in Stockholm.

But, he added: “Democracy is not a panacea. Introducing democracy is very hard. When you introduce elections, that sometimes creates conflict.”

In an interview with The Associated Press, Robinson, 64, said he doubts that China can sustain its economic prosperity as long as it keeps a repressive political system.

“There’s many examples in world history of societies like that that do well for 40, 50 years," Robinson said by phone. “What you see is that’s never sustainable. ... The Soviet Union did well for 50 or 60 years.''

Robinson said many societies have successfully made the transition to what he, Acemoglu and Johnson call an “inclusive society.’’

“Look at the United States," Robinson said. “This was a country of slavery, of privilege, where women were not allowed to take part in the economy or vote.”

“Every country that is currently relatively inclusive and open made that transition," he added. "In the modern world, you’ve seen that in South Korea, in Taiwan, in Mauritius.’’

Acemoglu and Robinson wrote the 2012 bestseller, “Why Nations Fail: The Origins of Power, Prosperity, and Poverty," which argued that manmade problems were responsible for keeping countries poor.

In their work, the winners looked, for instance, at the city of Nogales, which straddles the U.S.-Mexico border.

Despite sharing the same geography, climate and a common culture, life is very different on either side of the border. In Nogales, Arizona, to the north, residents are relatively well-off and live long lives; most children graduate from high school. To the south, in Mexico’s Nogales, Sonora, residents are much poorer, and organized crime and corruption abound.

The difference, the economists found, is a U.S. system that protects property rights and gives citizens a say in their government.

Acemoglu expressed worry Monday that democratic institutions in the United States and Europe were losing support from the population.

“Support for democracy is at an all-time low, especially in the U.S., but also in Greece and in the UK and France,“ Acemoglu said on the sidelines of the conference in an Athens suburb.

“And I think that is a symbol of how people are disappointed with democracy,” he said. “They think democracy hasn’t delivered what it promised.''

Robinson agreed. "Clearly, you had an attack on inclusive institutions in this country," he said. “You had a presidential candidate who denied that he lost the last election. So President (Donald) Trump rejected the democratic rule of the citizens. ... Of course, I’m worried. I’m a concerned citizen.”

Johnson told the AP that economic pressures were alienating many Americans.

“A lot of people who were previously in the middle class were hit very hard by the combination of globalization, automation, the decline of trade unions, and a sort of shift more broadly in corporate philosophy,'' Johnson said. "So instead of workers being a resource to be developed, which they were in the 19th and early 20th century, they became a cost to be minimized ... Now, that squeezed the middle class.’’

"We have, as a country, failed to deliver in recent decades on what we were previously very good at, which was sharing prosperity,'' Johnson said.

One key for the future, Johnson said, is how societies manage new technologies such as artificial intelligence.

“AI could go either way," he said. "AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom. And then, yes, you’re not going to like the political outcomes.’’

In their work, the economists studied institutions that European powers such as Britain and Spain put in place when they colonized much of the world starting in the 1600s. They brought different policies to different places, giving later researchers a “natural experiment" to analyze.

Colonies that were sparsely populated offered less resistance to foreign rule and therefore attracted more settlers. In those places, colonial governments tended to establish more inclusive economic institutions that “incentivized settlers to work hard and invest in their new homeland. In turn, this led to demands for political rights that gave them a share of profits,” the Nobel committee said.

In more densely populated places that attracted fewer settlers, the colonial regimes limited political rights and set up institutions that focused on “benefiting a local elite at the expense of the wider population," it said.

“Paradoxically, this means that the parts of the colonized world that were relatively the most prosperous around 500 years ago are now those that are relatively poor,” it added, noting that India’s industrial production exceeded the American colonies’ in the 18th century.

The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.

Though Nobel purists stress that the economics prize is technically not a Nobel Prize, it is always presented together with the others on Dec. 10, the anniversary of Nobel's death in 1896.

Nobel honors were announced last week in medicine, physics, chemistry, literature and peace.

Corder reported from The Hague, Netherlands, and Wiseman from Washington. AP reporters David Keyton in Berlin and Elena Becatoros in Athens contributed to this report.

University of Chicago professor James A. Robinson, one of three winners of the 2024 Nobel Prize in Economics, responds to a standing ovation during a news conference celebrating Robinson at university Monday, Oct. 14, 2024, in Chicago. (AP Photo/Charles Rex Arbogast)

Economist Simon Johnson poses for a photograph after jointly winning the Nobel memorial prize in economics, at his home in Washington, Monday, Oct. 14, 2024. (AP Photo/Ben Curtis)

Economist Simon Johnson poses for a photograph after jointly winning the Nobel memorial prize in economics, at his home in Washington, Monday, Oct. 14, 2024. (AP Photo/Ben Curtis)

Economist Simon Johnson poses for a photograph after jointly winning the Nobel memorial prize in economics, at his home in Washington, Monday, Oct. 14, 2024. (AP Photo/Ben Curtis)

Economist Simon Johnson poses for a photograph after jointly winning the Nobel memorial prize in economics, at his home in Washington, Monday, Oct. 14, 2024. (AP Photo/Ben Curtis)

Economist Simon Johnson poses for a photograph with his dog Zoya after winning the Nobel memorial prize in economics with Daron Acemoglu and James A. Robinson, at his home in Washington, Monday, Oct. 14, 2024. (AP Photo/Ben Curtis)

In this combination image left to right; Economist Daron Acemoglu in Athens Greece, Oct. 14, 2024, Economist Simon Johnson in Washington, Oct. 14, 2024, and Economist James A. Robinson in Chicago, Oct. 14, 2024. (AP Photo)

Nobel prize winner in Economics, James A. Robinson, responded to a question during an interview with The Associated Press at his home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson makes a selfie for the Nobel Foundation with his wife, Dr. Maria Angelica Bautista, and their son Adrian at their home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson, kisses his wife, Dr. Maria Angelica Bautista, at his home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson, looks over a selfie he made for the Nobel Foundation with his wife Dr. Maria Angelica Bautista, and son Adrian at their home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson, gives an interview to the Associated Press from his home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson, gives an interview to the Associated Press from his home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson, gives an interview to the Associated Press from his home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Nobel prize winner in Economics, James A. Robinson, gives an interview to the Associated Press from his home in the Hyde Park neighborhood of Chicago, Monday, Oct. 14, 2024. (AP Photo/Charles Rex Arbogast)

Economist Daron Acemoglu, 2024 Nobel prize winner in Economics, speaks to the media during a conference in Athens , Greece, Monday, Oct. 14, 2024. (AP Photo/Petros Giannakouris)

Economist Daron Acemoglu, 2024 Nobel prize winner in Economics, stands in an elevator after speaking to the media during a conference in Athens, Greece, Monday, Oct. 14, 2024. (AP Photo/Petros Giannakouris)

Economist Daron Acemoglu, 2024 Nobel prize winner in Economics, speaks to the media during a conference in Athens , Greece, Monday, Oct. 14, 2024. (AP Photo/Petros Giannakouris)

Economist Daron Acemoglu, 2024 Nobel prize winner in Economics, speaks to the media during a conference in Athens , Greece, Monday, Oct. 14, 2024. (AP Photo/Petros Giannakouris)

This image provided by the The University of Chicago shows James A. Robinson, one of three winners of the Nobel memorial prize in economics. (The University of Chicago via AP)

Economist Daron Acemoglu, 2024 Nobel prize winner in Economics, speaks to the media during a conference in Athens , Greece, Monday, Oct. 14, 2024. (AP Photo/Petros Giannakouris)

Journalists listen when Jan Teorell of the Nobel assembly announces the Nobel memorial prize in economics winners during a press meeting at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday Oct. 14, 2024. (Christine Olsson/TT News Agency via AP)

Academy of Sciences permanent secretary Hans Ellegren, center, Jakob Svensson, left, and Jan Teorell, of the Nobel assembly announce the Nobel memorial prize in economics winners, Daron Acemoglu, Simon Johnson and James A Robinson during a press meeting at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday Oct. 14, 2024. (Christine Olsson/TT News Agency via AP)

Academy of Sciences permanent secretary Hans Ellegren, center, Jakob Svensson, left, and Jan Teorell, of the Nobel assembly announce the Nobel memorial prize in economics winners, Daron Acemoglu, Simon Johnson and James A Robinson during a press meeting at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday Oct. 14, 2024. (Christine Olsson/TT News Agency via AP)

FILE - Daron Acemoglu of the Massachusetts Institute of Technology smiles in this image taken on June 22, 2019 in Kiel, Germany, as he and Simon Johnson and James A. Robinson won the Nobel prize in economics for research into reasons why some countries succeed and others fail. (Frank Molter, dpa via AP, File)

The Nobel memorial prize in economics awarded to Daron Acemoglu, Simon Johnson and James A Robinson, seen on screen, during a press meeting at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday Oct. 14, 2024. (Christine Olsson/TT News Agency via AP)

Academy of Sciences permanent secretary Hans Ellegren, center, Jakob Svensson, left, and Jan Teorell, of the Nobel assembly announce the Nobel memorial prize in economics winners, Daron Acemoglu, Simon Johnson and James A Robinson, seen on screen, during a press meeting at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday Oct. 14, 2024. (Christine Olsson/TT News Agency via AP)

FILE - A close-up view of a Nobel Prize medal at the National Institutes of Health (NIH) in Bethesda, Md., Tuesday, Dec. 8, 2020. (AP Photo/Jacquelyn Martin, File)

The Nobel economics prize is being announced in Sweden

The Nobel economics prize is being announced in Sweden

FILE - A bust of Alfred Nobel on display following a press conference at the Karolinska Institute in Stockholm, Sweden, on Monday, Oct. 3, 2022. (Henrik Montgomery/TT News Agency via AP, File)

NEW YORK (AP) — U.S. stocks are hanging near their records Wednesday as oil prices fall and ease the pressure on households and businesses worldwide.

The S&P 500 slipped 0.1% below its all-time high set the day before. The Dow Jones Industrial Average was up 183 points, or 0.4%, as of 12:56 p.m. Eastern time, and the Nasdaq composite was 0.1% lower.

Stocks of companies with big fuel bills helped lead the way on hopes that lower oil prices will remove a big drag on their profits. Norwegian Cruise Line Holdings climbed 5.7%, and United Airlines rallied 7.3%. Delta Air Lines rose 3.7% and is on track to set an all-time high.

The price for a barrel of Brent crude oil fell 4.1% to $95.48 after the ceasefire between the United States and Iran appeared to hold despite the U.S. military launching what it called “self-defense” strikes in southern Iran. A barrel of benchmark U.S. crude fell even more, 4.2%, to $89.69 on hopes that the United States and Iran can reach an agreement to reopen the Strait of Hormuz and allow oil tankers to exit the Persian Gulf for deliveries again.

Stocks have been able to run to records despite the painful inflation and uncertainty caused by high oil prices largely because companies have reported surprisingly strong profits for the start of 2026, and the forecast is for them to continue.

Bath & Body Works rallied 11.2%, and Abercrombie & Fitch climbed 11.8% after both reported bigger profit for the latest quarter than analysts expected. That's even as U.S. consumers continue to say they're feeling discouraged about the economy and inflation.

Lululemon Athletica rose 3.6% after reaching a deal with its founder, Chip Wilson, where it will add a former chief marketing officer of ESPN and a former co-CEO of On to its board of directors.

On the losing side of Wall Street was Dick's Sporting Goods, which dropped 4.9% despite delivering a profit for the latest quarter that edged past expectations. Analysts pointed to how much profit it wrung out of each $1 in revenue, which some called a bit weak.

Oil-and-gas stocks also sank, hurt by the dropping prices for crude. Exxon Mobil fell 1.4%, and Chevron slipped 0.8%. Halliburton dropped 3% to bring its gain for the year so far back toward 40%.

In the bond market, Treasury yields eased after falling oil prices took pressure off inflation. The yield on the 10-year Treasury slipped to 4.48% from 4.50% late Tuesday and from 4.67% roughly a week ago.

It’s a respite following recent gains for yields in bond markets worldwide, which threatened to slow economies and undercut prices for stocks and all kinds of other investments. High yields have already forced the average long-term U.S. mortgage rate to its most expensive level since last summer, and they could curtail companies’ borrowing to build the artificial-intelligence data centers that have supported the U.S. economy’s growth recently.

In stock markets abroad, indexes were mixed across Europe and Asia. South Korea's Kospi was one of the world's best performers and jumped 2.3% after SK Hynix, which is a big beneficiary of the artificial-intelligence boom, soared 9.3%.

A day before, Micron Technology surged to become the latest Big Tech company to be worth more than $1 trillion on AI excitement. Its stock has more than tripled already in 2026, and analysts at UBS said Tuesday it could soar even more because of how fundamentally AI has improved demand for computer memory.

AP Business Writer Elaine Kurtenbach contributed to this report.

Trader Edward Curran, left, and specialist Meric Greenbaum, center, work on the floor of the New York Stock Exchange, Friday, May 22, 2026. (AP Photo/Richard Drew)

A person looks at an electronic stock board showing Japan's Nikkei index at a securities firm Monday, May 25, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A dealer walks past near the screens showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at a dealing room of Hana Bank in Seoul, South Korea, Wednesday, May 27, 2026. (AP Photo/Lee Jin-man)

A dealer walks past near the screens showing the foreign exchange rates at a dealing room of Hana Bank in Seoul, South Korea, Wednesday, May 27, 2026. (AP Photo/Lee Jin-man)

A dealer walks past near the screens showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at a dealing room of Hana Bank in Seoul, South Korea, Wednesday, May 27, 2026. (AP Photo/Lee Jin-man)

A dealer stands near the screens showing the Korea Composite Stock Price Index (KOSPI), the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank in Seoul, South Korea, Wednesday, May 27, 2026. (AP Photo/Lee Jin-man)