Why are some countries rich and others poor?

This is the question the 2024 Nobel was awarded for, and it runs through institutional and welfare economics.

• Foundation

  Classical political economy

  Specialisation, trade and the accumulation of capital.

• Mainstream

  Neoclassical economics

  Capital and above all technology (Solow, 1956). Poor countries should catch up if their fundamentals are similar.

• Bridge

  Institutional economics

  Inclusive institutions: property rights, rule of law, limits on elites (North; Acemoglu, Johnson and Robinson).

• Heterodox

  Marxian economics

  Colonial extraction and unequal exchange keep poorer countries on the periphery.

• Bridge

  Complexity and evolutionary economics

  What a country knows how to make. Building capabilities and innovation (creative destruction) drives growth.

• Heterodox

  Austrian school

  Free markets, sound money and secure property let entrepreneurs find opportunities.

• Heterodox

  Ecological economics

  It questions the goal: rich countries should focus on wellbeing within planetary limits while poorer ones grow.