Economics

The Mystery of Inequality Why are some countries rich and stable while their neighbors are poor and chaotic? In their 2012 book Why Nations Fail, Daron Acemoglu and James A. Robinson argue that the answer is not geography, culture, or luck. It comes down to one thing: institutions. Let’s look at a real-world example: the city of Nogales. A fence cuts the city in half. On the north side, in Arizona, residents have property rights, a functioning legal system, and the power to vote people out of office. They are relatively wealthy and healthy. On the south side, in Sonora, Mexico, residents face corruption, unreliable laws, and economic instability. They earn a fraction of what their northern neighbors do. ...