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The balance between the state and society is the key to a functioning democracy. The state needs to play a role in enabling a prosperous society — providing things like education, healthcare, infrastructure, and protection from violence. But, equally, society’s individuals need to be protected from overreach of the state.

This tension is called the “narrow corridor”, a concept pioneered by Nobel Laureates Daron Acemoglu and James A. Robinson, winners of the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

The corridor is narrow, argue the Nobel Laureates, because maintaining this balance is incredibly difficult. China and Somalia, for instance, both fall outside the corridor — but for opposite reasons. China has a strong state that dominates society. Somalia has a fragmented society and almost no state. In both, meaningful inclusion remains elusive.

“You want the ability of any institution, third party, elite, or boss to be limited,” says Acemoglu. “You want the state, but to have that state very constrained so that it cannot do what states have done throughout humanity.”

“We've done a lot of research on this,” says Robinson. “Democracies experience more rapid economic growth. Democracies provide more public services; they invest more in education and things like that.”

But it’s also true to say that democracies don’t necessarily deliver inclusion. They can be clientelistic or corrupt. A democracy where institutions are weak will have limits to what it can achieve.

What are critical junctures?

Change can strike instantly or develop at almost glacial speed. When change is fast, it is often the result of a seismic shock. Wars, new economic opportunities, and fast-growing technology are some examples of shocks creating a critical juncture.

“Critical junctures destabilize existing orders and create a mismatch between existing institutions and people's aspirations,” says Acemoglu. “Critical junctures are big amplifiers of inequality, and they are handmaidens of big institutional changes.”

Acemoglu adds that the world is currently undergoing economic and cultural tensions which can call longstanding ideas about what constitutes democracy and freedom into question.

“It's really a struggle to stay within the corridor,” he says.

Staying within the corridor is especially difficult in contexts where wealth, power, and information are concentrated in the hands of a powerful few, he says.

What we’re seeing is a widening gap in inequality. Despite technology and information flows being broader and more accessible than ever before, the richest 20% of countries are now around 30 times richer than the poorest 20%.

“That’s just a mind-boggling gap,” he says. “How to make sense of it, I think, is one of the most important questions of social science, and it also helps us navigate the important institutional questions.”

What happens at a critical juncture?

At the point of a critical juncture, societies have a choice. “Either you're going to allow some of these changes to take place, or you have to take a very robust action against them. Once you fall behind, it becomes very difficult to build better institutions.”

“There are a lot of challenges at the moment, and the system is being shocked and challenged,” Robinson says. “What history suggests is that once you get onto these paths, it is difficult to get off that kind of path.”

How can education, participation, and new ideas drive positive change?

Acemoglu argues that in the current climate, informed and active citizenry is more important than ever. “Citizens have to be worried about technology, power, information, and jobs. All of this requires flexibility. We need to be adaptable as individuals, as societies.”

To achieve this, education matters. Participation matters. But above all, ideas matter. New technologies demand new narratives, new frameworks for thinking about inclusion, productivity, and power. “We need new ideas to beat bad ideas,” he says.

Constructing a roadmap for the future

Acemoglu’s advice to the next generation is both simple and demanding: remain vigilant, curious, and engaged. Acemoglu himself finds inspiration in unexpected places. Sometimes reading a line in a newspaper, a song or a movie, or reading an old historical document can spark an idea.

“We’re living through unusual times, so there isn’t a natural roadmap,” he says. “You have to have an open mind both about the dangers and the opportunities.”