This year’s Nobel Prize in Economic Sciences has been awarded to three scholars, and on the 14th, Professor Qiu Dasheng from National Dong Hwa University shared his insights on their groundbreaking work. He emphasized that the trio has devoted their research to understanding the impact of policies on the economy, particularly in efforts to reduce income inequality within nations. Their recognition reflects the academic community’s increasing concern about the issue of wealth disparity in today’s world.

Professor Qiu Junrong from National Central University noted that the winners’ theories align closely with institutional economics, emphasizing that while the fundamental principles of economics rely on market mechanisms, the government plays a crucial role. It must not only align with market forces but also use institutional frameworks to guide the market efficiently, ensuring that wealth is distributed equitably.

Professor Qiu Dasheng also pointed out that all three laureates advocate for the idea that “institutions” can significantly influence prosperity. They have focused on addressing the vast income gap between countries, which he identifies as a major challenge of our time. Their research highlights a staggering disparity: the wealth of the world’s richest 20% of countries is 30 times that of the poorest 20%, and while the wealth of affluent nations continues to grow, low-income countries struggle to close the gap.

Adding to this, Professor Qiu Junrong remarked that the laureates have made substantial contributions to our understanding of the reasons behind the disparities in prosperity among nations. They have demonstrated the critical importance of social institutions in promoting national wealth. In essence, while economics primarily revolves around market dynamics, it is also essential for governments to make necessary adjustments through sound institutional policies. This approach can guide economic development in a positive direction, ensuring that resources are allocated more efficiently and allowing the public to benefit from economic growth.

On the contrary, if a government’s established social institutions and incentives contradict market principles, it can hinder societal benefits and even cause harm. Thus, it is crucial for government-designed institutions to align with the cultural and social characteristics of the nation to yield favorable outcomes.