Building Prosperity: Nobel Laureate James Robinson Explains How Institutions Shape Nations

On Tuesday, October 28th, StFX welcomed Nobel Prize winner James A. Robinson as the inaugural speaker for the Brian Mulroney speaker series, which invites thinkers representing diverse points of view to examine topics and issues facing the world today.

James Robinson, a prominent economist and political scientist, opened the discussion honoring former prime minister, Brian Mulroney, “as a statesman of remarkable stature who achieved many things for Canada.”

Robinson’s scope of research focuses heavily on world living standards, from Singapore to Qatar, and income per capita, which has “enormous consequences for people’s lives, opportunities and welfare.” Building on this foundation, Robinson turned to the central question underlying his work: why some nations achieve prosperity and stability while others remain trapped in poverty and inequality.

To address this question, Robinson discussed how economists have long examined the role of technology and innovation, specifically, “the factors that make humans more productive” as a key explanation for differences in prosperity. Referencing the Industrial Revolution, Robinson states that it “ushered in the enormous inequality we see in the world today” as it brought in new technologies, the factory system and new methods of power. As he explained, “The poorest countries in the world don’t innovate very much, and they don’t allocate a lot of resources to innovation.”

On the topic of innovation, Robinson states that “the crucial thing in having an innovative society is you have to structure the rules, the institutions and the incentives so all of that latent talent can come to the top”. This is in reference to the patent system, which Robinson believes to be beneficial to those countries with thriving economies. The patent system has the property of inclusivity, meaning anyone could come forward with an innovation, file a patent and everyone must pay the same fee for the state to enforce your intellectual property rights. Having inclusive economic institutions (the patent system being one of them), is what raises productivity and living standards. “Innovation is what it’s all about”.

In explaining how these inclusive institutions work, innovation and incentive are central factors, ; however, they are not the only way to achieve inclusion. Robinson elaborates on how you can “bring innovations from outside, import innovations and you can import people also, who have skills and knowledge who can use innovations,” referencing the success Korea and Singapore have achieved economically.

Building on the idea of inclusive institutions, Robinson raised a key question: what explains the variation in economic systems, and why do some countries develop effective property rights while others do not?

The answer: politics. Having successful inclusive economic institutions requires inclusive political institutions. The two dimensions to this are having a state with capacity, and the broad-based distribution of political power.

Robinson discusses how when you have extractive economic growth, and when you have extractive political institutions, growth is transitory. He quotes Lord Acton, an English Liberal historian and moralist, “Power tends to corrupt, and absolute power corrupts absolutely.” He argues that “concentrated autocratic power always ends up getting abused at the expense of people’s welfare and also at the expense of the economy” and “to have innovation you have to allow people to do their thing, you have to allow people to just go for it, to allow them to build businesses and be entrepreneurs”.

Looking into the future, the presentation closes with an emphasis that institutions must be flexible and forward-looking to keep pace with technological change, globalization and evolving labour markets. Without adaptability, even established systems risk deepening inequality and disillusionment. By fostering innovation, protecting rights, and ensuring opportunities for all, inclusive institutions can not only sustain prosperity but also shape a future where societies thrive together.