2024 Nobel Prize Economist Comments

From the study, whyWealththerefore the country is different Indicates that the differences are due to differences in institutions. (Institutions) Refers to the particular way in which society is organized. Government organizations and systems that each country has are not new

But what is new and will affect this year’s awards is the educational approach. Both empirically (Empirical) and the proposed theory. which led to the aforementioned conclusions This is the point of today’s writing.

Differences in growth and economic inequality are important problems in national development andeconomistIn the past, a lot of weight was given to this issue.

But three economists won the Nobel Prize this year. which is considered the highest honor He wants to emphasize the importance of institutional features in the public sector in leading the country to prosperity.

He presents empirical research that confirms the importance of this relationship from historical data. Including that theoryWhy can some countries do it? That is, there are good government institutions that lead the country to prosperity. But some countries can’t do it. which is very interesting

institutionin the economic sense Referring to systems and organizations in the public sector. which includes the political and bureaucratic systems It is responsible for implementing laws, establishing policies, issuing regulations, and governing the country. All these are important for the growth and prosperity of the economy.

That is, if the systems and organizations in the government sector are good Those with authority will work strongly. Create the right economic incentives The economy grows. Most people benefit and rich countries This good system is called research.An open or inclusive system

On the other hand, a bad system is a system that does not support economic growth. Making most people unprofitable There is a lot of poverty. Because those in power intend to use the system of government they have established for their own benefit and gain. This system is called research.System of withdrawal or exploitation

Economic growth is referred to as growthCapitalism The main driving factors are the protection of property rights (Property Rights), capital accumulation and competition.

therefore Good government institutions that enable economic growth must make these things happen. By Enforcing Necessary Laws Enforce the law vigorously and fairly. Create a market system that emphasizes competition, not monopoly, and has a financial system that facilitates raising money.

The political system is open and the exercise of power by those in power can be scrutinized. This is a good (inclusive) institutional system in the public sector that is leading the country to prosperity.

The question is, how can we ensure that good institutions like this will bring the country to prosperity? And how did this great institution come about? These are the two questions whose answers led to this year’s Nobel Prize in Economics.

To test the relationship between public institutions and economic prosperity Nobel Prize recipients use historical events such assettlementof European countries five hundred years ago is a case study.

By tracing the results of colonization:How did the colonizing country choose to change public administration in the colonized country? Especially government institutions related to the allocation of economic resources.

And look at the differences in the elected government institutions in each colony. How has this led to differences in the economic prosperity of each country so far? It’s an ingenious way to find answers. And let us summarize the way to find the answer easily as follows.

When the country was captured The question that the colonial country must answer is: Will it be a short or long stay? “Stay short” is to focus on taking the colony’s resources and taking them away.

“Long stay” means making the colony a place of residence and livelihood for people from their own country who want to immigrate to build a life, build a new country as a second home, and create economic growth.

The deciding factor for a short or long stay is the germs in the area. and local population density as well as resistance. The result is that colonial countries choose to live long in countries that are safe from germs. and the number of local people is small, such as America, Canada, Australia, New Zealand, and they choose to stay for a short time in countries where the risk of germs is high and the number of local people is large, such as India and Mexico.

What happens is that it is in the colonies that choose to stay long. Colonizing countries will use good (inclusive) government institutions to create incentives for people to immigrate. Come invest and create a new life.

At the same time, immigrants want to participate in politics in their new country to prevent those in power from using their power to harm the new country. Thus, good institutions in the public sector and democratic politics were put in place from the beginning and they have continued with the economic development of the country up to the present day.

In the colony that was chosen was the long time. A system of extractive government institutions will be used as a tool to control the local people. Take advantage and transfer resources and benefits back to the settler country. by working with local elites

As a result, these colonies were ultimately poor and underdeveloped. and before this poor colonies have become rich countries today. This reversal of fortune is a direct result of a different system of government institutions.

to support the above conclusion The Nobel laureate has done research in econometrics Use the numbers of immigrant deaths during the colonial period as a proxy for good institutional systems at the time gone.

and indicates that there is a positive relationship with the current GDP level of the country. It is the system of good government institutions in the past that has led to the prosperity of the country today. It is a research result that emphasizes the importance of government institutions in the growth of the country.

To the question why inclusive government institutions do not appear widely. The Nobel laureate has proposed a theory that The system of extractive public institutions benefits the powerful and the elite, so they do not want to change it.Power divisionfor fear of losing control Don’t want to reform for fear of losing

But division or step down from power will come eventually. Because the number of people who want change in society is high. This leaves the elite with no other choice. An inclusive government institutional system has finally emerged.

This is the opinion of the economist who won the Nobel Prize this year.

Column Bachelor of Economics

Dr. Bandit Nichtathawoorn

Chair of the Public Policy Foundation for Society and Good Governance

[email protected]