The world’s most influential economist is oddly unconvincing

BY THE TIME he received the call from Stockholm, it felt overdue. In 2024 Daron Acemoglu of the Massachusetts Institute of Technology shared the Nobel prize in economics with Simon Johnson and James Robinson for work on how institutions shape prosperity. Mr Acemoglu is only 58 years old, but for some time he has been the discipline’s colossus. He has written seven books, including a new one about democracy and the economic impact of artificial intelligence, not counting a couple of popular textbooks. His hundreds of papers, more than ten of them published so far this year, are often stuffed with complex mathematics. He competes with Andrei Shleifer of Harvard University for top spot on a citation ranking of economists produced by IDEAS/RePEc, a research database. His opinions carry great weight with other wonks and the media.

Give an economist a few drinks, however, and some of them will venture their true opinions about this giant. “Much of his theoretical work is useful, but he uses his models to inform populist policies that have been tried before and failed,” blasts one well-known economist. Some commentators do not require Dutch courage. “I’ve been yelling about Acemoglu for literally a decade,” Noah Smith, an economics blogger, has said, in response to a flurry of online criticism of Mr Acemoglu’s work.

No one accuses the prolific economist of truly poor research, let alone academic malpractice. “He is obviously a genius,” says another, who also points out that he is generous to PhD students and junior colleagues. The question is whether Mr Acemoglu’s reputation at the very apex of the economics profession—and the intellectual influence that goes with it—is justified by his scholarship.

Start with his empirical methods. His Nobel rests heavily on a paper released in 2001 with Messrs Johnson and Robinson, which researchers have cited more than 23,000 times. It seeks to explain why some countries are rich and others poor. In places where European settlers died in droves, perhaps because of disease, colonisers built “extractive” institutions, with power and resources concentrated in the hands of an elite few, to take as many resources from the area as possible. But in more agreeable climates, settlers survived. In these places the colonists built more inclusive institutions, with proper roads, schools and medical services. Those institutions persisted, with the effect that places with lower settler mortality during colonial times are richer today.

Economists now take these results seriously but not literally. The paper encouraged wonks to think more deeply about institutions, but they have also picked it apart. The Nobel committee’s report in 2024 conceded that the mortality data are “sometimes sketchy”. In 2012 David Albouy of the University of Illinois Urbana-Champaign showed that some countries were assigned mortality rates borrowed from other countries, among other adjustments. Correct for these, he found, and the paper’s estimates become unreliable. A paper last year by Martin Buchner of RWI-Essen, a research institute, and colleagues found that experts they surveyed were somewhat more likely to side with Mr Albouy on the matter.

Mr Acemoglu says that “these discussions and some critiques are hugely valuable.” But he counters that Mr Albouy reaches his conclusion by omitting half the data from the original sample, including on important countries like America, Canada and Australia. It is this combination, along with some statistical choices, that introduces the unreliability, he says. He also adds that if he were redoing the paper today, he would make “a number of changes, including in some of the estimation details”—though not to the mortality data.

Most recently, researchers have examined a paper that Mr Acemoglu released in June, with a series of co-authors, which reported that lower birth rates are associated with faster growth in GDP per working-age adult. This is a striking finding, seeming to suggest that places that are losing population, like Japan, do not have much to worry about. Yet other economists, including Jesús Fernández-Villaverde of the University of Pennsylvania, question whether historical relationships are really useful to understanding the present, where in many countries birth rates are collapsing. It is a perfectly reasonable point—and Mr Acemoglu and his co-authors raise it briefly in their conclusion. But it can get lost and can seem unsophisticated when set against the reams of mathematics Mr Acemoglu deploys.

After prodding and probing, a determined critic could find holes in almost any researcher’s work—and Mr Acemoglu is the biggest target in economics. Yet fame-induced scrutiny cannot explain the second problem: that Mr Acemoglu’s ideas can seem underwhelming for a titan of social science. His public commentary, especially on American politics, is unadventurous. His “unified theory of Trump”, for instance, asserts that the American president operates “by elevating executive power and destroying constraining institutions and norms”. Well, obviously.

Institutions and institurtles

More worrying is that his grand thesis of institutions may not reveal very much. Nations prosper when institutions are good, and stagnate when they are bad. True. But what, exactly, is an institution? Rules, norms, enforcement, culture—everything, really. Where do institutions come from? From “critical junctures” and “institutional drift”, whatever that means.

Reviewing one of Mr Acemoglu’s books in 2011, Tyler Cowen of George Mason University noted that the institutional changes it describes only seem to come from other institutional changes, making the core argument regress for ever—turtles all the way down. Duncan Green of the London School of Economics has argued that the framework works mainly in hindsight. Francis Fukuyama of Stanford University has argued that the book waves away the example of China, which has seen blistering economic growth alongside institutions that can quite plausibly be described as extractive.

Mr Acemoglu retorts that the book devotes two chapters partly or mostly to China. As for the turtles, he observes that “to understand institutional change from an institutional perspective you must consider the specific institutions in the past and the historical events…that influence them.” “I don’t think this is tautological at all,” he says.

To the extent that Mr Acemoglu breaks from received wisdom, it is mainly to espouse remarkably glum views about technology. “Power and Progress”, a book from 2023 co-written with Mr Johnson, treats a thousand years of innovation largely as a story of elite capture and unintended consequences. The cotton gin was the handmaiden of slavery, while the Haber-Bosch process created chemical weapons. Ordinary people apparently gained only when they could steer capitalists to consider their interests. The book plays down a much more compelling claim: that technological progress in and of itself has made the average person many times richer than in pre-industrial times.

Mr Acemoglu’s arguments about AI are also pessimistic to the point of losing their credibility. In a paper released in 2024 he calculates that AI will boost American productivity by only a small amount over ten years. The paper reaches this conclusion by ignoring the potentially transformative effect of new AI products coming to market. “He leaves out entirely in that analysis the possibility that we will have more rapid scientific progress, more rapid social-scientific progress, or better decision-making because of artificial intelligence,” according to Lawrence Summers, president emeritus of Harvard University (and former treasury secretary).

“This is a valid criticism,” says Mr Acemoglu. “I did not foresee agentic AI and it was not incorporated in my predictions.” He also notes that AI models may be more useful in scientific research than he imagined. But he stands by his methods of estimating the productivity effects of AI, as well as injecting “some realism into the claims about huge coming productivity improvements”.

These academic disputes may seem unimportant, but they could end up mattering a great deal. Mr Acemoglu may not think AI is about to turbocharge productivity, but he does worry about its effects on democracy and jobs. His new book focuses on the potential social harms of the technology (worsening atomisation, spreading political fakery) rather than its potential benefits. His proposal to limit those harms, “pro-worker AI” that would augment the value of human labour rather than replacing it, sounds terrific—and obvious.

Mr Acemoglu’s influence in the AI debate is clear in a recent statement, signed by dozens of prominent economists, which argues that “we must act now” to “steer AI in a direction that complements humans and benefits society”. Who is the “we”, exactly? The Trump administration? And who is to decide what sort of AI does and does not complement humans? Even economists who signed the petition say they are not entirely sure. So great is Mr Acemoglu’s stardom that it can sometimes blind the critical faculties. ■