Democracy is in a ‘tough stretch.’ New Nobel winners explain how to strengthen it

Hours after winning the Nobel Prize this week, two MIT economists discussed how their research can offer solutions at a time when democratic institutions are increasingly under threat around the world. 

MIT Institute Professor Daron Acemoglu, MIT Sloan professor Simon Johnson, and University of Chicago professor James Robinson shared the 2024 Nobel Memorial Prize in Economic Sciences for their research on the differences in prosperity between nations. 

The trio’s seminal research established that inclusive institutions — those that adopt political and economic rules that allow for broad participation in society — are more stable than others and lead to stronger economies and happier citizens. Those ideas became the basis of Acemoglu and Robinson’s book “Why Nations Fail.”

In a press conference following the announcement of the award, Acemoglu and Johnson discussed the state of democracy and how it can be improved through individual and collective action and through the decisions societies make about technology. Here are some of their main arguments. 

Political and economic inclusion both matter

Inclusive economic institutions offer property rights and equality of opportunity, Acemoglu said. “But we also emphasize that political inclusion — meaning, a framework in which people have voice, [and] power is equally distributed and not monopolized by one group, one person, [or] one party — is key,” Acemoglu said. “It’s very difficult to maintain economic inclusion when you are ruled by the iron fist of an autocrat.”

Acemoglu’s research with Robinson and others has found that democracy directly contributes to economic growth. “It takes a couple of years, and it’s a difficult business to make democracy work, but generally countries that democratize grow faster and they grow in a way that’s more equal; [they] invest more in education and health,” Acemoglu said. “Both political and economic inclusion matter, and they are synergistic.”

Declining labor markets undermine support for democracy 

Democracy is “going through a very, very tough stretch,” in part because it has not realized its promise for all people, Acemoglu said, particularly those at the lower end of the labor market. A recent report found that in 2023, political rights and civil liberties were diminished in 52 countries, while only 21 countries made improvements. 

“If you look at support for democracy in the industrialized world, it’s at an all-time low. People are much more willing to say they would be OK, or they would support an authoritarian regime or dictatorship, a military rule, or [being] ruled by junta,” Acemoglu said. 

Those sentiments are rooted at least partly in people’s disappointment with democracy. “Democracy hasn’t realized its promise of voice for all and shared prosperity for all,” Acemoglu said. “We find that democracies get more support when they deliver on their promises, such as clean governance without corruption, more shared prosperity, better public services, and so on.”

Johnson said that pressures over the past 40-plus years from automation, globalization, and the decline of trade unions have undermined the middle class. “It’s pressed a lot of people down from that middle to the lower end of the labor market,” he said. “That’s extremely disappointing, and that’s a failure to deliver. I think all societies are naturally held to account for that, and that includes this democracy.”

When asked how to translate research into policy, Johnson said, “My bumper sticker is: More good jobs. Find ways to create more good jobs in your own community [and] spread prosperity that way.” 

Science, technology, and invention can help “create better lives for people, both in terms of how the technology is used and the jobs that you create in that technology innovation process and in its deployment,” Johnson said. 

Humans must take charge of new technologies to evolve institutions 

In their recent book “Power and Progress,” Acemoglu and Johnson argue that the way technology is deployed has a large impact on who gets access to opportunities and how institutions change. 

“So far, humans have proved to be good at developing technology, but whose problems are we trying to solve? Who’s making the choices about technology?” Johnson asked, noting that society has important decisions to make about the development of new technologies, including artificial intelligence, and their impacts on electoral democracy. 

Asked what people can do to preserve democratic institutions, Acemoglu identified social media as one area where individuals can exert control. 

“Walk away from all social media and media sources that try to polarize us,” he said. “Only by people walking away and not rewarding these really pernicious sources of echo-chamber polarization, pollution of communication, can we actually fix the system. We should stop rewarding them.”

Johnson characterized the state of democratic institutions as “a tough moment, a challenging moment, a moment of stress” but said he sees a role for individual and collective action. “The choices that need to be made about technology and about political outcomes rest with us. And it’s a responsibility that we need to take seriously. 

“If our research has pushed people in that direction, and if today’s incredible, amazing prize helps raise awareness, then I think all the work we’ve done over the past two and a half decades has been worth it,” Johnson said.