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The 2024 Economics Nobel and the Colonial Blind Spot in Its Institutions Argument

The prize-winning work studied colonial institutions. The debate is whether its account of inclusion and prosperity gives enough weight to dispossession and exclusion.
From TheFinanceBase Team5 min to read
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The 2024 economics prize-winning work explicitly examined colonial institutions; the criticism is more specific than saying its authors ignored colonialism. Kate Meagher argues that a framework emphasizing institutions that protected European settlers can call those institutions “inclusive” without adequately accounting for the Indigenous people and colonized majorities whose land, rights, and livelihoods were taken or restricted to create settler wealth. That is a substantial critique of the framework’s distributional lens, not an established consensus that the work has been invalidated.

What the 2024 Economics Nobel recognized

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel went to Daron Acemoglu, Simon Johnson, and James A. Robinson for “studies of how institutions are formed and affect prosperity.” The Royal Swedish Academy of Sciences’ public explanation connects their work to the different political and economic arrangements European powers established in colonized places, and to the relationship between those arrangements and later prosperity.

In the committee’s summary, settlement conditions helped shape institutional differences. Where European settlement was more feasible, colonial institutions could protect settlers’ property and encourage investment. Elsewhere, political rights were restricted and economic arrangements served a narrow elite. The committee presents these contrasts as a way to understand long-run differences in prosperity; its summary is not a complete history of colonial governance or a claim that colonial rule was benign.

The Associated Press described the researchers’ approach as using colonial-era differences as a “natural experiment.” Here, that phrase refers to a research strategy that uses historical variation to examine relationships between institutions and economic outcomes. Colonialism was not a controlled or ethically neutral experiment.

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What “inclusive” can mean—and whom it can leave out

In her 2024 LSE International Development essay, “Does the Nobel Prize in Economics 2024 Signal a Reversal of Fortunes for Settler Colonialism?”, LSE Professor of Development Studies Kate Meagher asks who actually received the property protections, political participation, and economic opportunities associated with inclusive institutions. Her concern is that a description centered on settler security can obscure the coercion and dispossession that made that security possible for one group.

Question Institution-focused account in the Nobel committee’s summary Meagher’s critique
Who is included? Settlers’ political claims and economic activity are central to the contrast. Ask whether Indigenous people and colonized majorities were included in those rights and opportunities.
Whose property is secure? Protection of settlers’ property can encourage investment. Examine whether property regimes were built through land seizure, forced removal, or coercive state power.
What explains prosperity? Institutional arrangements help account for long-run economic differences. Imperial power, dispossession, and extraction may be part of how wealth and property regimes were created, not merely background conditions.
What counts as success? The account addresses prosperity across countries over time. National prosperity measures can leave distribution within societies—of land, wealth, rights, and harm—less visible.

The key distinction is between institutions that protect a settler population and institutions that include all people subject to colonial rule. Under the first description, settlers may have secure property and political influence. Under the second, the same society may appear deeply exclusionary if Indigenous people and colonized majorities are considered too. Meagher’s point is not only that some people were left outside an otherwise neutral system: coercion and land dispossession may have helped establish the property and wealth that the system protected.

Meagher’s examples of settler colonialism

Meagher discusses African settler economies such as Kenya and South Africa, as well as settler states including Australia, Argentina, Canada, and the United States. She argues that land dispossession, forced removal, marginalization, and violence sit uneasily with broad claims of inclusion. She also draws on African scholars and historical frameworks that treat settler and “labour reserve” economies as especially damaging to popular inclusion and as forces that crushed Indigenous institutions. These are the examples and intellectual traditions in her critique, not a complete survey of scholarship on colonial development.

For South Africa, Meagher’s 2024 essay says settlers who made up less than 20% of the population seized 87% of the land. That is her reported example, not a figure supplied by the Nobel committee or attributed here to the laureates. Her essay passage presents it within the argument but does not establish further details about the figure’s original dataset, date, or precise definition of land seized.

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Does the critique mean the laureates ignored colonialism?

No. The Nobel committee’s account explicitly discusses institutions established under European colonial rule, and the AP report describes colonial institutions as part of the laureates’ research. The sharper question is whether the categories used to explain institutional inclusion and prosperity give enough weight to imperial coercion, dispossession, and the people excluded from settler rights.

That distinction matters when judging the claim. Saying that colonial institutions shaped later outcomes is not the same as explaining, in equal detail, how those institutions distributed property, political power, and harms among the people they governed. The criticism targets what may be foregrounded or left less visible in the analysis; it does not establish that the authors omitted colonial history altogether.

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How far can the “blind spot” claim be taken?

“Colonial and imperial blind spot” is a framing of Meagher’s critique, not a finding that the sources establish as disciplinary consensus. The evidence here supports two distinct statements: the Nobel committee presented the laureates’ institutions-and-prosperity argument, and Meagher argued that its emphasis can understate the violence and exclusion underpinning settler institutions. It does not settle the broader empirical dispute or show that historians and economists agree on one verdict.

For readers assessing the argument, the most useful questions are concrete: who counts as included, whose property rights are protected, whether coercion is treated as a cause or only as context, and whether national prosperity is distinguished from the distribution of land, wealth, and rights within a country. Those questions help identify the scope of the critique without turning it into the unsupported claim that the prize-winning work has been wholly disproved.

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Why the distinction matters for understanding prosperity

A country’s aggregate prosperity does not by itself show who gained from the institutions associated with it. A framework can help explain differences in national economic performance while leaving an important distributional question open: whether the rights and returns credited to “inclusive” institutions extended to the whole population or primarily to settlers and elites. Meagher’s intervention asks readers to keep that question in view when interpreting the Nobel committee’s summary.

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