The three academics won the prize mostly for providing causal evidence of the influence of the quality of a country’s institutions on its economic prosperity.
At first glance, this may seem like reinventing the wheel. Most people would agree that a country that enforces property rights, limits corruption, and protects both the rule of law and the balance of power, will also be more successful at encouraging its citizens to create wealth, and be better at redistributing it.
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Looking at the colonial roots of institutions is an attempt to disentangle causes and consequences.
Maybe I'm not well versed in economic theory standards, but saying they found a causal relationship by analysing colonial roots of institutions does not really pass my standards as a physicist. To me, it just makes for a nice story with a mission.
What do the econ experts here think about this article and the prize this year?