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The Nobel Prize in Economics goes to prosperity researchers

Darren Acemoglu, Simon Johnson and James A. Robinson received this year’s Nobel Prize in Economic Sciences for their contributions to proving the importance of public institutions to a country’s prosperity.

KEY FACTS

  • The prestigious prize, officially known as the Sveriges Riksbank Prize for Economic Sciences in Memory of Alfred Nobel, is the last prize awarded this year and is worth SEK 11 million ($1.1 million).
  • This year’s laureates showed that one of the explanations for differences in countries’ prosperity is the social institutions introduced during European colonization. Inclusive institutions were often introduced in countries that were poor at the time of colonization, which over time led to general prosperity for the population. This is an important reason why former colonies that were once rich are now poor and vice versa.
  • Introducing inclusive institutions would create long-term benefits for everyone, but extractive institutions provide short-term gains for those in power. As long as the political system ensures they retain their control, no one will trust their promises of future economic reforms. According to the laureates, this is the reason why there is no improvement.
  • “Reducing the huge income gaps between countries is one of the greatest challenges of our time. The laureates have demonstrated the importance of public institutions in achieving this,” said Jakob Svensson, Chairman of the Economic Sciences Prize Committee.
  • “Societies with poor rule of law and institutions that exploit the population do not generate growth or change for the better,” the prize’s organizers add on their website.

TANGENT

Darren Acemoglu and Simon Johnson work at MIT, while James Robinson is at the University of Chicago.

Acemoglu and Johnson recently collaborated on a book researching technology through the ages that demonstrates how some technological advances are better at creating jobs and spreading wealth than others.

KEY STORY

The Economics Prize is not one of the original science, literature and peace prizes created by the will of dynamite inventor and businessman Alfred Nobel and first awarded in 1901, but is a later additional prize established and funded by the Central Bank of Sweden in 1968.

Past recipients of the award include a number of influential thinkers such as Milton Friedman, and John Nash – played by actor Russell Crowe in the 2001 film A Beautiful Mind, and former US Federal Reserve Chairman Ben Bernanke.

Last year, Harvard economic historian Claudia Goldin won a prize for her work highlighting the causes of pay and labor market inequality between men and women.

Cyprus Tightens Oversight Of Foreign-Interest Companies

yprus is revising the framework for companies with foreign interests, introducing stricter compliance checks and new requirements designed to attract businesses that make a substantive contribution to the economy.

The Cabinet approved the changes on Tuesday following a proposal from the Ministry of Energy, Commerce and Industry. In a post on X, Energy Minister Michalis Damianos said the revised framework aims to attract companies with a genuine presence in Cyprus and the potential to create added value.

Greater Focus On Real Economic Activity

The revised framework prioritises companies’ actual economic activity, regardless of the origin of their capital. As part of the changes, the existing register will be renamed the “Business Facilitation Centre Register”.

The new rules also strengthen compliance monitoring and establish procedures for removing companies that fail to meet their obligations. Checks on the 70%–30% employment ratio will be conducted seven years after registration.

Annual Employment Reporting From 2027

From January 1, 2027, registered companies will be required to submit annual employment reports. The measure is intended to improve transparency and help authorities monitor compliance with the framework.

The revisions also clarify the conditions under which companies may retain their registration if their ultimate beneficial owners obtain Cypriot or other EU citizenship.

Part Of A Wider Business And Talent Strategy

According to Damianos, the changes aim to attract companies with a substantive presence, growth potential and a measurable contribution to Cyprus’s economy. The framework introduces clearer procedures and oversight while reinforcing existing obligations.

The decision forms part of a broader review of Cyprus’s Strategy for Attracting Businesses and Talent, which is expected to be completed by December 2026.

The first consultation workshop with the business community and other stakeholders took place on October 28, with a second scheduled for October 29.

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