Nobel Lecture - Disease Environments, Mortality, and the Creation of Institutions (Simon Johnson, 2024)

 

Summary: Disease Environments, Mortality, and the Creation of Institutions (Simon Johnson, December 8 2024)

Simon Johnson revisits the roots of colonial-era institutions across the globe, showing how disease environments shaped European settlement—and in turn, whether inclusive or extractive institutions took root. Regions where settlers faced low mortality (e.g. North America, Australia) tended to develop inclusive governance structures; in contrast, places with high mortality (e.g. West Africa, parts of India) became sites of extractive institutions. These early institutional pathways created a lasting “reversal of fortune”: areas rich before colonization often became poor, while previously less developed regions eventually prospered due to inclusive norms. Johnson emphasizes that the interplay between disease, settlement decisions, institutions, and long-term prosperity remains deeply relevant today, especially amid AI-driven technological disruption. Studentportal+9NobelPrize.org+9NobelPrize.org+9

🟦 THOUGHT CARD: DISEASE, COLONIAL SETTLEMENT & INSTITUTIONAL ORIGINS

1. Background Context

Classic economic development theories often point to geography, culture, or resources as drivers of prosperity. Johnson and his colleagues introduce a more nuanced explanation: environmental and institutional feedback loops. Specifically, historical disease environments shaped European settlement patterns, which then determined whether inclusive or extractive institutions emerged—creating trajectories that echo across centuries. This framework builds directly on the institutional development paradigm advanced by Acemoglu, Robinson, and others. NobelPrize.org+1

2. Core Concept

  • Disease environments directly influenced settler mortality and colonization strategies.
  • Areas with low settler mortality incentivized European settlement, leading to institution-building tailored to long-term rule and investment.
  • Regions with high mortality led colonizers to establish extractive systems—emphasizing resource extraction without inclusive governance.
  • These divergent institutional paths produced a reversal of fortune: former wealthy regions could lag behind, while once-poor areas with inclusive systems gained ground. NobelPrize.org+5NobelPrize.org+5NobelPrize.org+5Chalmers University of Technology+3NobelPrize.org+3NobelPrize.org+3

3. Examples / Variations

  • North America, Canada, Australia: Low disease risk → European settlement → inclusive political and economic institutions.
  • West Africa, Caribbean, parts of India: High disease risk → few settlers → extractive institutions designed to extract without long-term investment.
  • Reversal of Poverty/Wealth: Places rich in precolonial times (like dense coastal civilizations) often became poor under extractive regimes; sparsely settled areas today rank among the wealthiest in GDP per capita. NobelPrize.org
  • Modern Tech Inflection Points: Small institutional differences today—especially around AI and innovation policy—can amplify across time, mirroring past trajectories. NobelPrize.orgMIT Economics

4. Latest Relevance

  • AI & Institutional Resilience: Societies with inclusive frameworks are better positioned to distribute AI’s benefits widely; extractive systems risk concentrating power. MIT EconomicsIMF
  • Policy Design: Debates about data ownership, tech regulation, and innovation equity reflect institutional legacies and current decision-making structures. IMFMIT Economics
  • Global Inequality: Legacy institutions explain why resource-rich regions remain impoverished—calling for institutional reform, not just investment. NobelPrize.org+1

5. Visual or Metaphoric Form

  • Three-tier Mortality Spectrum Map: Regions mapped as low/high settler mortality zones tied to different institutional outcomes.
  • Reversal Graph: A chart showing initial economic rank versus present-day GDP per capita—illustrating reversal of fortune.
  • River Fork Metaphor: Early institutional forks lead societies down divergent paths toward inclusion or extraction.

6. Resonance from Great Thinkers / Writings

7. Infographic or Timeline Notes

Timeline of Institutional Divergence:

  • 1500s–1800s: European colonial expansion into diverse disease environments.
  • 1800s–1900s: Divergence of inclusive vs. extractive institutional systems.
  • 1900s–2000s: Institutional persistence, reversal of fortune materializes.
  • 2020s onward: Digital/regulatory inflection—AI and tech accelerate inequality where institutions are extractive.

Conceptual Flow:

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Disease Risk → Settlement Strategy → Institutional Design → Long‑Term Prosperity

8. Other Tangents from this Idea

  • Climate Change: How environmental shocks may parallel past disease shocks, influencing institutional resilience.
  • Tech Colonialism: How global tech platforms may extend extractive structures across borders.
  • Institutional Upgrading: Under what conditions can extractive systems be transformed?
  • Narrative Economics: How colonial institutions shape modern beliefs, trust, and identity in economies.

Reflective Prompt:
Where in your context do early design choices—whether institutional, technological, or social—still shape opportunity today? If emerging tech is the new frontier, how might institutional quality determine who prospers—and who remains marginalized?

 

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