Why Nations Fail: The Origins of Power, Prosperity, and Poverty

“The city of Nogales is cut in half by a fence. If you stand by it and look north, you’ll see Nogales, Arizona […] Life south of the fence, just a few feet away, is rather different.”

This quote sets the stage for a stark comparison between two halves of the same city, divided by a border. The imagery of standing by the fence and looking in different directions to see contrasting realities creates a visual metaphor for economic disparity. The proximity of these two worlds, “just a few feet away,” emphasizes the arbitrary nature of borders in determining quality of life. This juxtaposition is not just geographical but also socio-economic, highlighting how political and economic institutions, more than geographic determinants, shape the lives of people living there.

“Nogales, Arizona, is in the United States. Its inhabitants have access to the economic institutions of the United States […] Those of Nogales, Sonora, are not so lucky.”

This quote captures the crux of the book’s argument: the significant impact of institutions on economic prosperity. The phrase “not so lucky” subtly introduces the concept of institutional luck, implying that the fate of individuals is largely influenced by the institutional framework of their country. The contrast drawn between the two cities of Nogales underscores the authors’ central thesis that it is institutions, rather than culture, geography, or knowledge, that primarily drive economic success or failure.