This year’s Nobel Prize in Economics has been awarded to Oxford alumnus Simon Johnson and his colleagues Daron Acemoğlu and James A. Robinson. Their research aims to answer the age-old question: Why do some nations flourish while others remain trapped in poverty? Their pioneering work reveals that the answer lies in institutions – both political and economic – and how they shape the prosperity of nations.
Simon Johnson studied History and Economics and later PPE as an undergraduate at Corpus Christi College from 1981 to 1984. Currently a professor at MIT, he has long focused on the role of institutions in shaping economies as he taught at Harvard, Duke and MIT. Johnson also served as the chief economist at the International Monetary Fund from 2007 to 2008.
Johnson and his colleagues arrived at their award-winning conclusions by studying historical data, particularly focusing on settler mortality rates during European colonisation. They found that regions where settlers faced high mortality rates often developed extractive institutions – designed to exploit resources for the benefit of a few. These institutions continue to contribute to modern-day poverty and inequality. In contrast, regions where settler mortality was low saw the establishment of more inclusive institutions, which fostered long-term economic growth by encouraging investment, political participation, and the rule of law. Their research revealed a “reversal of fortune”, where less developed regions with more inclusive institutions were better positioned during the Industrial Revolution to leverage technological advancements, driving rapid economic growth.
Cherwell asked Johnson to reflect on his time here at Oxford and how it influenced his career.
Cherwell: How did your time at Oxford affect your career and the accomplishment of this achievement?
Johnson: In three years at Oxford, I learned to think and to argue. I also learned to listen and to take on board the perspective of others. I attended every lecture that seemed at all interesting, undergraduate and graduate level. I went to any seminar that I could fit into my schedule. And then I studied hard at some very different places – I have a master’s from Manchester and a PhD from MIT, I did a post-doctoral fellowship at Harvard; and I worked for 6 years at a leading American business school (the Fuqua School at Duke University), where an important part of my job was to set up a management education centre in St. Petersburg, Russia, shortly after the collapse of the Soviet Union. I ran research projects based in Poland and Ukraine, attempting to understand post-communist realities. Then I joined the faculty at MIT Sloan, where I worked on the ground during the Asian Financial Crisis, trying to figure out how countries like Indonesia and South Korea could get back on their feet, and helped build a global entrepreneurship program.
To return to your question: Underpinning my entire career – research, publications, and a wide variety of policy roles – is what I learned at Oxford.
Cherwell: What was your student experience like – did you enjoy it?
Johnson: Oxford was incredible. I took a year off between school and university and had a wide variety of experiences (including five months as an army officer and supervising the kitchen shift at a fast food restaurant in Sheffield). I started Oxford with a clear understanding that, if I did well, my life opportunities would improve. Everyone I met in my first week at Oxford was smart and articulate. My first history essay was entirely mediocre (I started in History and Economics). To swim in this ocean, I realised that I needed to work hard. The returns to that effort were immediate and rather amazing.
Cherwell: Is there anything about Corpus specifically that you found particularly special?
Johnson: Corpus was (and I’m sure still is) a brilliant place. The people around me were clever and thoughtful. Almost all of them were better prepared than I was. It felt intensely competitive but in a good way. The tutors were tough but extraordinarily kind, and they gave me access to top minds across the university, including for one-on-one tutorials (I’ve supervised budgets at a wide variety of schools, and the economics of this still blow my mind). As an 18-year-old, I was thrown into the midst of intense ideas and arguments. If you did the work, you were always treated as plausible equal by much more knowledgeable people. There are not many places in the world where that is true. I still can’t believe how lucky I was to spend three formative years at Corpus.
Cherwell: What was your experience studying under Professor Andrew Glyn?
Johnson: Andrew Glyn was a gentle genius. He taught us neoclassical economics, but as a toolkit, not as a framework for understanding the world. He was a Marxist, but he did not try to convince us to adopt his views. He challenged us to think clearly, even if that involved challenging him. And when you showed him a spark (like a perhaps surprising distinction in prelims in History and Economics in early 1982), he backed you all the way. I switched to PPE at his recommendation, so I could take more economics papers and he arranged for me to be tutored by some of the best minds at the university. And then he pushed me out of the nest – told me that I had learned what I could at Oxford and I should go to America to get my PhD.
From Andrew I had learned to argue, to follow the logic, and to think about what other people were missing. I vividly recall that after one long wrangle about substance, Andrew said I was “bloody minded”. For a long time, I preferred to think of myself as tenacious. But thinking back now about my 30+ years at the intersection of research and public policy, working around the world, getting tenure at a leading business school, rising to the top of the IMF, advising presidential candidates, testifying to Congress (including when committees are controlled by people who really don’t like you views), briefing G7 central bank governors (who also don’t necessarily like where you are going with your arguments), perhaps Andrew knew exactly what I was – and what I could become. I’m very sad that he did not live to see this moment. I’m sure he would have pushed me, even now, to do more – and to do better.
Cherwell: What in particular do you think Oxford gives its students to be able to succeed in their chosen careers?
Johnson: I can only really speak to my experience – History and Economics for prelims, and then PPE (with as much Economics as possible, and never any Philosophy!). In those programs, at least as run at Corpus 1981-84 (although I’m confident this part is quite general and still true), it’s the intensity of the tutorial system, the feedback on your thinking, the pressure to be coherent, and answer the question on two very different topics every week. It’s not easy to stay organised, to get enough sleep, and to keep that focus for an entire term. But if you crack the code and figure out to do well at that pace, you can do anything.
Cherwell: What do you miss most about being a student here?
Johnson: There was a protected and safe feeling about learning at Oxford. The tutors really cared and paid close attention to pretty much everything you said and wrote. I’ve never had that kind of feedback from (even excellent) teachers elsewhere. But I have experienced the same intensity of thinking and of developing ideas in much of my professional work, including in the intensely collaborative research with Daron Acemoglu and Jim Robinson that won the Nobel prize. Oxford was, it turns out, the best preparation possible. But, exactly as Andrew Glyn made clear to me, after three years it was also good to leave, and not to look back.
Cherwell: How has winning the Nobel Prize affected your life?
Johnson: Winning the Nobel prize in economics is an incredible honour and a much greater accomplishment than I expected from my career. My current focus is on building a research and policy group at MIT, focused on how to develop technology (particularly AI-based) that will help boost the productivity and pay – and therefore improve the lives – of workers who do not have a lot of formal education. This work is joint with Daron Acemoglu and David Autor (of MIT Economics), and I hope that winning the prize will enable us to make progress faster in a way that is more relevant for people around the world.
Cherwell: What in particular do you think people should know about your research?
Johnson: We won the prize for work that began about 25 years ago, and the seminal papers (according to the Nobel prize committee) were published in 2001 and 2002. But we have continued to build on these contributions – including by incorporating the amazing work of others – with the goal of providing constructive ideas about how to better share prosperity in societies at all income levels. Today, the accelerated arrival of enhanced Artificial Intelligence capabilities provides the world with a choice: Will we develop technologies that enhance the productivity and improve the life chances of everyone, or will we slip into another phase of excessive automation, contributing to further job market and social polarisation?
