MIT's Acemoglu Wins a Top Medal in Economics

By JON E. HILSENRATH Staff Reporter of THE WALL STREET JOURNAL April 25, 2005; Page A2

Perhaps geography isn't destiny.

A long line of economists have argued that a country's geographical traits, like its temperature and its exposure to seaports, are the key factors that determine whether its people will be trapped in poverty. A Turkish-born economist named Daron Acemoglu challenged that idea and Friday won the economic profession's recognition as the nation's top young economist.

Mr. Acemoglu is the recipient of the American Economic Association's John Bates Clark medal, given every two years to the nation's best economist under the age of 40. Mr. Acemoglu, 37 years old, is a professor at the Massachusetts Institute of Technology. The medal has been a good predictor of future Nobel prize winners -- of the 29 economists who have won the award since 1947, 11 went on to win Nobel awards later in life, including Paul Samuelson, Milton Friedman and Joseph Stiglitz.

With a detailed eye on long stretches of economic history, Mr. Acemoglu has written several papers arguing that a nation's political and social institutions play the key role in guiding its economic destiny.

In one paper he detailed how civilizations that were rich compared with the rest of the world in 1500 -- such as the Mughals, Aztecs and Incas -- evolved into poor countries today, a point that contradicts the idea that geography is destiny. Instead, he says, differing political institutions set up by colonial powers in places like North America, South America and Africa, set the very different economic courses traveled by countries in these regions.

The research offers some hope for poor countries. If they can simply find better ways to govern themselves, they might grow faster. But Mr. Acemoglu says his research shows how these political institutions and, more important, the political power around them often become entrenched and resistant to change, lessons being learned right now in places like Iraq and Russia. "It is a cautionary tale," he says.

The race for the award this year was considered a tight one. One other candidate, Edward Glaeser, a professor at Harvard University, has challenged Mr. Acemoglu's work on institutions, arguing that it isn't political institutions that determine an economy's growth. He says a third factor plays the critical role: the skills of a nation's work force.

Prof. Acemoglu’s personal home page is at http://econ www.mit.edu/faculty/?prof_id=acemoglu