Opinion: Inclusive Institutions Are Key to Prosperity and Democracy

The 2024 Nobel Prize laureates in Economic Sciences, Daron Acemoglu, Simon Johnson, and James Robinson, have provided groundbreaking insights into why some countries thrive while others struggle with poverty. Their research on the relationship between political and economic institutions and national prosperity offers a powerful framework for understanding the importance of diversity, equity, and inclusion (DEI) in today’s changing global economy.

In their study of colonization’s impact on modern institutions, the laureates showed that societies shaped by extractive systems—where political and economic power is concentrated in the hands of a few—tend to stagnate, leaving the masses in poverty. Conversely, societies that adopted inclusive institutions—those that protect individual rights, provide economic freedom, and encourage broad political participation—have experienced sustained prosperity. Their work demonstrates that institutions are the bedrock of economic and social equality, and the way they are structured can either reinforce or dismantle barriers to opportunity.

What struck me most in their findings was how deeply relevant this is to the fight for inclusive democracy today. As economies and nations evolve, we cannot ignore the fact that the institutions we build and maintain will either pave the way for shared prosperity or deepen inequality. The laureates’ research highlights a stark reality: without inclusive political and economic systems, societies will struggle to address the vast disparities in wealth and opportunity that persist globally.

DEI as a Pathway to Inclusive Democracy

The connection between their research and DEI efforts is clear. When institutions are extractive, when they are built to serve the interests of a small elite, they hinder growth, innovation, and equity. These systems are resistant to change because those who benefit from them fight to maintain the status quo. Yet, the laureates also show us that change is possible when the majority mobilizes and demands reform.

For me, this is a crucial lesson for DEI advocates. Our efforts to foster equitable workplaces, fair policies, and inclusive governance face resistance, often from those who benefit from unequal systems. But as Acemoglu, Johnson, and Robinson point out, real transformation happens when we mobilize broad support for inclusion and create institutions that reflect the diversity of the people they serve.

Building Inclusive Institutions for Long-Term Prosperity

The laureates’ work also reinforces the idea that inclusive institutions are essential for long-term economic growth. Their research on colonialism’s legacy shows that in regions where institutions were built to extract resources and exploit labor, poverty is now widespread. On the other hand, where inclusive institutions were established, prosperity followed.

This is a critical lesson for today’s political leaders, business executives, and DEI advocates. If we want to build economies that are not only prosperous but also equitable, we must create institutions that prioritize fairness, equity, and participation. This requires addressing systemic barriers that limit access to education, healthcare, and economic opportunities for marginalized groups. It also means ensuring that political systems are inclusive, allowing all voices to be heard and fostering trust between leaders and citizens.

The Future of Inclusive Democracy

An inclusive democracy is built on the principles of equity and shared power. The Nobel laureates’ research underscores that democratic systems thrive when institutions are designed to serve everyone, not just the powerful few. The wealth gap between rich and poor countries, and even within countries, is a reflection of the institutions in place. Where political and economic systems are more inclusive, we see greater prosperity and stability.

As we think about the future of our democracies, it is essential that we build institutions that reflect the diversity of our populations and create opportunities for all citizens to participate and thrive. DEI is not just a moral imperative; it is a practical pathway to sustainable growth and social stability. The work of Acemoglu, Johnson, and Robinson is a reminder that the institutions we build today will shape the prosperity and inclusivity of our societies for generations to come.

In conclusion, inclusive institutions are the foundation of both prosperity and democracy. As the laureates have shown, when we prioritize inclusion, equity, and fairness in our political and economic systems, we create the conditions for long-term growth and stability. It is up to us to take these lessons and apply them to the ongoing work of building a more just, inclusive, and equitable world.

Effenus Henderson