Early in his career, Simon H. Johnson studied the transition of economies in the former Soviet bloc away from communism and towards capitalism. This gave him an understanding of why institutions could be so important to global economic development – something he has since described as pivotal in his career. He also met fellow academics Daron Acemoglu and James A. Robinson, with whom he wrote countless journal articles and ultimately shared the Sveriges Riksbank Prize in Economic Sciences in 2024.
Johnson became interested in studying how institutions and human behaviour interconnect, as conventional economic theories – both macro and micro – could not adequately explain what happened in economies like Türkiye under military rule and eastern European countries after communism fell. His research has shown that democratic systems – particularly characterized by legal frameworks and personal freedoms – have been key drivers of economic growth across the past five centuries. By examining how colonial histories continue to influence worldwide development patterns, his research offers valuable perspectives for contemporary economic policymaking.
One important focus of his research examined how European colonisation from the 1400s to early 1900s caused significant transformations in Indigenous societies. Larger Indigenous populations initially resisted colonisation but, once conquered, provided more workers for colonizers to exploit. This meant fewer European settlers were needed in these areas, and those who did come typically established or took over systems designed to extract resources and wealth. In contrast, smaller Indigenous populations required more European settlers to create an exploitative economy.
As more Europeans settled in these smaller colonies, they demanded political representation and their fair share of economic benefits. The type of colonial institutions that emerged had lasting effects on economic development. Larger colonies with extractive systems eventually declined economically, while smaller colonies with more inclusive institutions (though still not fully democratic) experienced economic growth. These patterns became entrenched because elites in extractive colonies wanted to maintain their exclusive privileges, while European settlers in smaller colonies worked to preserve their rights and benefits.
Simon Johnson’s work has deeply influenced current economic theory and given government officials important insights for tackling economic disparities and creating lasting prosperity. He stepped away from academia to join the International Monetary Fund (IMF), where he served as chief economist and economic counsellor from March 2007 to August 2008 during the onset of the global financial crisis.
Simon Johnson was born on 16 January 1963 in Sheffield, United Kingdom. He studied politics, philosophy, and economics at Corpus Christi College, University of Oxford, graduating in 1984 and subsequently obtained an MA in Economics at the University of Manchester. He moved to the United States and received a PhD in economics from the Massachusetts Institute of Technology in 1989. His dissertation was entitled “Inflation, Intermediation, and Economic Activity”. He has taught at several institutions including Harvard University, Duke University, the Massachusetts Institute of Technology, and the National Bureau of Economic Research. He is currently – 2025 – the Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management.