Economists question validity of Nobel Prize winners' theories on institutions and growth

Daron Acemoglu, Simon Johnson, and James A. Robinson won the Nobel Prize in Economics for their work on the role of institutions in economic development. Their theories suggest that inclusive institutions lead to prosperity, while extractive ones hinder growth. However, some economists question the validity of their findings. Critics argue that the data used in their research is flawed and that their conclusions may not hold up under scrutiny. For instance, a key study relied on conjectured data for many countries, which raises concerns about its accuracy. Further analysis indicates that factors like human capital may better explain economic outcomes than the institutions AJR emphasize. This ongoing debate highlights the complexities of understanding economic development and the need for continued research in the field.