In this combination image left to right; Economist Daron Acemoglu in Athens Greece, Economist Simon Johnson in Washington, and Economist James A. Robinson in Chicago, Oct. 14. AP-Yonhap

This year's Nobel economics prize laureates on Monday applauded South Korea's economic rise, a key subject of their research, but pointed out a set of challenges ahead, including the fast-graying population of Asia's fourth largest economy.

They also drew a stark contrast between the economic backwater of North Korea — a repressive country under an institutional framework that they said serves only a certain elite class — and South Korea under a more "inclusive" system that creates broad opportunities for its people.

The Nobel committee of the Royal Swedish Academy of Sciences announced that the coveted prize was awarded to Daron Acemoglu and Simon Johnson at the Massachusetts Institute of Technology (MIT), and James Robinson at the University of Chicago for having "demonstrated the importance of societal institutions for a country's prosperity."

During an online press conference, Acemoglu shared his thoughts on how institutions matter for a country's economy and prosperity, citing the 2012 book, "Why Nations Fail," co-authored by him and Robinson.

"In fact, South Korea versus North Korea contrasts at the beginning of the book because it beautifully illustrates the role of institutions," he said in response to a question from Yonhap News Agency. "The South and the North ... were on a par before the country was separated, and diverged in terms of its institutions and over time, a more than ten-fold difference built up."

But Acemoglu noted that South Korea's ascent was not without problems.

"Democratization was very difficult, but the evidence that ... for example, we have our democracy and growth paper (that) shows the South Korean economy picked up speed after democratization, and did so in a more healthy way," he said.

The economist also touched on hurdles facing South Korea's economy.

Economist Daron Acemoglu, 2024 Nobel prize winner in Economics, speaks to the media during a conference in Athens , Greece, Oct. 14. AP-Yonhap

"Right now, South Korea is still dominated by large corporations, which brings some benefits and some costs, and South Korea is dealing with one of the most rapidly aging populations," he said.

"It has done reasonably well in that context by using a combination of technologies and other adjustments, but it is a very difficult transition," he added, stressing that "openness to new ideas and new technologies" will be "very important" going forward.

In the same press meeting, Johnson talked about South Korea's "remarkable" economic achievements as well as the Asian country's tough struggles to reach where it stands now. He noted that his wife's family is from South Korea.

"South Korea started out poor after World War II. In fact, in the early 1960s, it was very poor. It was quite authoritarian. At the beginning, over time, there was economic growth and an effort to democratize, which was difficult and messy, and there are plenty of struggles. It's not an easy journey," he said.

"But I think as a result, the South Korean economy, which is again not without its problems today, but it's in a much better shape and their achievements are really remarkable compared to what some other countries have been able to pull off."

He underscored that South Korea's trajectory is a case in which his and Acemoglu's work "should orient people."

Both professors painted a dark picture of North Korean institutions.

Prof. James Robinson of the University of Chicago meets with press, colleagues, and students at the university after learning that he had won the 2024 Sveriges Riksbank Prize in Economics in Memory of Alfred Nobel, Oct. 14, in Chicago, Ill. AFP-Yonhap

"I think one of the emphasis of our work has been (that) institutions are bad because they serve certain people's interests. They are bad often for society, but quite lucrative for the people who control the institutions," he said, noting that the North Korean system is "cemented at least for now."

"North Korea is again a case in point ... North Korean people are under great oppression right now, but I think that system is facing more and more difficulties and one day, hopefully, it will unite with South Korea under a more democratic system," he added.

Johnson said that North Korea has "retreated into its shell and created a system that favors a very few people."

"A lot of people in North Korea have suffered over many years, and these few people are heavily armed, and they've acquired or built for themselves a lot of nuclear weapon capacity and then also some rocket launch capacity," he said. "That's not insignificant. This is extremely dangerous."

He also underlined the importance of the leadership role for institutional improvements.

"Just because better, stronger institutions give you more inclusive growth and allow more people to climb out of poverty ... (that) does not mean that all leaderships want to embrace such institutions," he said.

Economist Simon Johnson poses for a photograph after jointly winning the Nobel memorial prize in economics, at his home in Washington, Oct. 14. AP-Yonhap

"On the contrary, many leaderships around the world have gone in another direction in recent years. So there are many things to worry about in the North Korean situation."

While noting that institutions are not a "panacea," Acemoglu stressed inclusive economic institutions ensure secure property rights and uphold equal opportunities and a level playing field, and inclusive political institutions make sure that power is equally distributed.

"Political and economic institutions are synergistic," he said. "It is very difficult to maintain economic inclusion when you are ruled by the iron fist of an autocrat."

In an exclusive interview with Yonhap News Agency on the day, Robinson touted South Korea as "one of the most remarkable economic success stories in world history" as he drew comparison with North Korea's institutional fabric.

"North Korea got taken over by what we call extractive institutions that benefit a small elite, and South Korea got constructed and built in a very different way with far more inclusive institutions that gave broad-based opportunities and incentives, and created dramatic social mobility and innovation," he said.

He catalogued achievements that South Korea has made under an inclusive system.

"We see all that innovation, not just in industry ... I don't mean just Samsung or Hyundai, but in culture, in art ... K-pop and in movies," he said.

"That's creativity. That's human ingenuity and creativity and innovativeness, and it's that South Korea's inclusive institutions have unlocked." (Yonhap)