On January 14, 2025, the Heilig-Geist-Kapelle at Humboldt-Universität of Berlin became the setting for an inspiring evening. The event combined the Nobel Prize Lecture 2024 with the institution's annual New Year's Reception, attracting scholars, students, and professionals eager to explore economic insights and exchange ideas.
Insights into Groundbreaking Research
After the welcoming words of the Dean of the School of Business and Economics, Prof. Dr. Daniel Klapper, the evening’s highlight was a presentation by Prof. Dr. Nikolaus Wolf (Humboldt-Universität zu Berlin) on the transformative work of this year’s laureates of the Sveriges Riksbank Prize in Economic Sciences: Daron Acemoglu, Simon Johnson, and James A. Robinson. Prof. Wolf began by exploring the historical reality of extractive and inclusive colonial institutions—the former being systems designed to concentrate wealth and power among a select few, often at the expense of societal development, and the latter fostering widespread participation and equitable resource distribution. These observations formed the foundation of the laureates’ research, which examined the causal relationship between inclusive political institutions and economic growth.
Delving deeper into the findings, Prof. Wolf highlighted how European colonization played a pivotal role in shaping present-day institutional disparities. In regions with dense populations, colonizers introduced extractive institutions that prioritized elite interests, while in sparsely populated areas, they established inclusive systems that encouraged broad participation and long-term prosperity. Using innovative data, such as settler mortality rates, the laureates demonstrated how these institutional choices had enduring effects: higher mortality rates led to extractive frameworks, whereas lower rates enabled inclusive ones. This paradoxical pattern—termed "reversal of fortune"—showed that areas once prosperous before colonization often became poorer under extractive systems.
The laureates' framework emphasizes the importance of mobilizing collective pressure, resolving conflicts between elites and the masses, and overcoming the commitment problems that hinder reforms. While their work sheds light on the challenges of institutional transformation, it also offers hope for fostering inclusive systems that promote equitable growth and reduce inequality. Prof. Wolf’s call to action urged the audience to reflect on these findings and consider the steps needed to build inclusive institutions for the future.
An Evening of Reflection and Celebration
Following Prof. Wolf’s engaging lecture, attendees were invited to the New Year's Reception hosted by the School of Business and Economics. The event provided an opportunity for meaningful dialogue among participants, fostering connections across academic disciplines and professional spheres.
The evening exemplified the mission of the Berlin School of Economics: to bridge theoretical insights with real-world applications, contributing to a deeper understanding of global economic challenges. The Nobel Prize Lecture and accompanying reception set an inspiring tone for the year ahead, reminding all present of the transformative power of ideas and institutions.
