A Nobel prize for explaining why there's global inequality

Why do some nations fail and others succeed?

In the late 1990s and early 2000s, three economists formed a partnership that would revolutionize how economists think about global inequality. Their work centered on a powerful - and almost radically obvious - idea: that the economic fate of nations is determined by how societies organize themselves. In other words, the economists shined a spotlight on the power of institutions, the systems, rules, and structures that shape society.

We spoke with two of the Nobel-winning economists about their research on why some countries are rich and others are poor, why it took so long for economics to recognize the power of institutions, and what the heck those even are.

This episode was hosted by Jeff Guo and Greg Rosalsky. It was produced by Willa Rubin with help from James Sneed. It was edited by Martina Castro and fact-checked by Sierra Juarez. Engineering by Gilly Moon with help from James Willetts. Alex Goldmark is Planet Money's executive producer.

Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.

(Image credit: Clement Morin)