Corruption aside, which is certainly not the case in Sweden, a Nobel committee can:
a) promote a political agenda,
b) further its own reputation, the reputation of the associated prizes, and the reputation of the science under consideration, or
c) criticism minimization, which is close to b) but looks at the left-hand tail of the opinion distribution rather than the mean.
I favor a mix of b) and c), at least for the economics prize; for more detail see my book What Price Fame?
Factor c) decreases the chance of Paul Krugman and also, I am sorry to say, Gordon Tullock, who is more than willing to say what he thinks. b) decreases the chance of Oliver Hart and many other theorists. Wilson and Milgrom, whose work has been used to design auctions, stand a better chance. The work of Hart and Tirole is of very high quality but I am not sure it would add luster to the prize. How many people can understand it, and has it influenced policy? And has the work of Paul Romer, and associated ideas of increasing returns, stood the test of time? If we remove Africa from the data set, the world appears to exhibit growth convergence over time.
I’ve already picked Fama and Thaler as my prediction for this year. I also think Oliver Williamson is more likely to get it than most top economists think. Bhagwati fits the bill, but it brings up the awkward question of whether he should be bundled with Krugman (trade theory) or Tullock (rent-seeking). Keep in mind that the Nobel Committee members are not Harvard-MIT insiders, and they have more of an outsider’s perspective on what is likely to endure.
Greg Mankiw considers what a prize committee should maximize. Does the prize encourage swinging for "home runs" when more people should be hitting for "singles"? I don’t think Nobel Prize prospects spur many great contributions to economics in the first place; the best scientists have strong internal and external motivations in any case. Nobel Prizes do motivate lobbying trips to Sweden; one Harvard economist in particular is well-known for these "vacations."
I see the welfare-maximizing use of the Nobel Prize as generating more publicity for economics, attracting more people to study the science, and giving the science greater credibility in the eyes of politicians, the public, and media. That means the committee should give prizes to economists who are articulate, intelligible, scholarly, and work on topics of real world interest. So far they have done a great job; let’s hope for another first-rate pick.