Three economists Daron Acemoglu, James Robinson, and Simon Johnson (from left) received the 2024 Nobel Prize in Economics - Photo: Reuters, MIT
It is no surprise that this year's Nobel Prize in Economics was awarded to three American institutional economists, Daron Acemoglu, Simon Johnson and James Robinson, for their pioneering research on how institutions shape the prosperity of nations.
The work of economics professors at the Massachusetts Institute of Technology (MIT) and the University of Chicago provides insights into the factors that determine the growth and prosperity of some countries while others are stuck in poverty and backwardness.
In other words, the research of three institutional economists has helped explore the role of institutions in determining whether a country develops or remains stuck in poverty.
Mr. JAKOB SVENSSON (Chairman of the Economic Sciences Prize Committee) said that the three laureates have identified the historical roots of the weak institutional environments that characterize many low-income countries today.
The importance of progressive institutions
For developing and emerging countries like Vietnam, this year's Nobel Prize in Economics (also known as the Nobel Prize in Economic Sciences) offers profound and meaningful lessons about the importance of progressive and inclusive institutions, especially in the context of Vietnam's efforts to promote institutional reforms.
In their numerous studies, most notably their famous book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Daron Acemoglu and James Robinson argue that some nations are richer and more prosperous than others because of their political and economic institutions, not because of their climate, geography, or culture.
In other words, it is institutions – both political and economic – that shape a country’s destiny, not its fate. Good institutions (called “inclusive” or “reinforcing”) create favorable conditions for attracting investment, creating growth and prosperity; while bad institutions (“extractive” or “extractive”) make countries less attractive, unstable, and increasingly poor.
“Inclusive” institutions promote broad participation of citizens and society as a whole in economic and political life, protect business and property rights, and encourage innovation and creativity. In contrast, in states with “extractive” institutions, power and wealth are often concentrated in the hands of a small elite, limiting citizen participation and often stifling innovation.
Inclusive institutions enable all citizens to have the right and opportunity to contribute to economic activity and benefit from growth, while extractive institutions are designed to exploit resources and seek special privileges for the benefit of a few, leading to cycles of poverty, inequality and backwardness.
Many profound lessons for Vietnam
It can be said that the 2024 Nobel Prize in Economics brings many profound and important lessons to Vietnam, especially in the period when the Party and State are making great efforts to promote institutional reform as one of three strategic breakthroughs.
The country's economic renovation and opening up process was carried out nearly four decades ago, in the form of a shift from a planned economy to a market economy, but in essence it was a shift to applying more inclusive and inclusive economic institutions.
These reforms have contributed decisively to Vietnam's poverty reduction and impressive economic growth, which have been highly appreciated by the international community. However, the inertia of the old reforms no longer exists and it is necessary to create a strong driving force for institutional reform to maintain the growth trajectory, making our country a high-income country by 2045 as set out by the 13th National Party Congress.
Lessons from the studies of Acemoglu (Turkish-American) and Johnson and Robinson (British-American) emphasize the importance of adopting and maintaining “inclusive” institutions to promote transparency, good governance, and broad participation of all actors in economic decision-making.
The professors' work may have helped Vietnam find solutions to its development challenges, opening up even greater potential for the country's future development.
Such “inclusive” institutions must ensure property rights for citizens, promote fair competition, foster healthy entrepreneurship, encourage innovation, enhance resilience, enhance economic integration and diversification, and promote economic progress and the advancement of the whole society.
In addition to building good institutions, important lessons from the studies of Acemoglu, Johnson and Robinson are to avoid "extractive" institutions, where economic power is concentrated in the hands of a small elite, privileged groups, leading to increased inequality and weakening the country's long-term growth potential.
This is a common problem faced by many developing and emerging countries, where institutional reforms that benefit the entire population are often opposed by a small, privileged group.
For Vietnam, this implies the need to continue efforts to fight corruption and waste and ensure accountability for results to the people.
In recent times, the Party's anti-corruption campaign has achieved many important results, initially building people's trust. However, we also need to reform existing institutional shortcomings in a more comprehensive and inclusive manner to be the fundamental solution to fight corruption and waste.
Only in that way can our country foster a favorable environment for innovation and entrepreneurship, promote sustainable and inclusive growth, and bring prosperity to the nation and its people.
Source: https://tuoitre.vn/nobel-kinh-te-2024-va-bai-hoc-ve-the-che-cho-viet-nam-20241015081612447.htm
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