UPDATED: "The richest 20 per cent of the world’s countries are now around 30 times richer than the poorest 20 per cent. Why? Differences in a society’s institutions."

"The richest 20 per cent of the world’s countries are now around 30 times richer than the poorest 20 per cent. Moreover, the income gap between the richest and poorest countries is persistent; although the poorest countries have become richer, they are not catching up with the most prosperous. ... Why? ... [D]ifferences in a society’s institutions. ...
    Europeans’ colonis[ed] large parts of the globe. One important explanation for the current differences in prosperity is the political and economic systems that the colonisers introduced, or chose to retain, from the sixteenth century onwards. The laureates demonstrated that this led to a reversal of fortune. The places that were, relatively speaking, the richest at their time of colonisation are now among the poorest. ...
    "In [these] colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonisers. In other cases [however], the colonisers built inclusive political and economic systems for the long-term benefit of European settlers. ... [These] settler colonies – needed to have inclusive economic institutions that incentivised settlers to work hard and invest in their new homeland. In turn, this led to demands for political rights that gave them a share of the profits. Of course, the early European colonies were not what we would now call democracies but, compared to the densely populated colonies to which few Europeans moved, the settler colonies provided considerably more extensive political rights. ...
    "[T]hese initial differences in colonial institutions are an important explanation for the vast differences in prosperity that we see today. ...
    "[This year's Nobel laureates in economics] have uncovered a clear chain of causality. [Mercantilist] institutions that were created to exploit the masses are bad for long-run growth, while ones that establish fundamental economic freedoms and the rule of law are good for it."

~ from the 'Popular Information' released by the Nobel Prize Committee, awarding this year's Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 to Daron Acemoglu, Simon Johnson and James A. Robinson. [Hat tip Conversable Economist]

UPDATE: Not everyone's happy that the Prize has gone to what economist Deirdre McCloskey calls "a B+ statist": 

McCloskey of course has her own answer to what caused the prosperity that Acemoglu et al ascribe to good institutions: a cultural change before the Industrial Revolution she calls the "bourgeois revolution." Her ideas are debated here. For what it's worth, I'm in agreement with the great Joel Mokyr who says, "Ideas mattered, but so too did institutions."