Recently, the Nobel Prize in Economics was awarded to a trio of scholars for their research into “how institutions are formed and affect prosperity.” The prize was well deserved, but their theory is partly flawed.
No doubt Daren Acemoglu and James Robinson of MIT and Simon Johnson of the University of Chicago have each contributed fresh insights to their field and have written bestselling books on economics, but the theory they lay out in their research shows signs of silver-bullet oversimplification that clashes with real world data on the topic.
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