​​Why Nations Fail

Why are some nations poor while others are rich? This is an extremely complex and challenging question to answer, but we can start by analysing the history of various countries. It is important to examine the root causes of inequalities, and to explore the different governmental systems, in order to find solutions to bridge the enormous gap between rich and poor countries.

There are many misconceptions surrounding the reasons why nations fail, but history teaches us that most of these hypotheses are without grounds. The city of Nogales, for instance, is located on the border between Arizona and Mexico; it is divided into two very distinct parts: the relatively well-off American side of the border, and the much poorer Mexican side.

According to the geographical hypothesis, some nations are more prosperous because they are lucky enough to be located in places with a pleasant climate. However, the poorest countries in the world are almost all found in tropical regions, while the richest countries are located in climatically cooler areas. Ecologist and evolutionary biologist Jared Diamond put forward the theory that people living in warmer countries tend to be lazier and less productive than those living in countries with a milder climate. Diamond also says that the higher rates of disease in the tropical areas of Central Africa and Central America mean that a person living in Zambia, for instance, will be less productive than someone living in Norway.

So why do countries like North and South Korea have such divergent economies? Why is Singapore so prosperous despite its tropical climate? Why do the inhabitants of both parts of Nogales, who experience the same rates of disease and climate, have such different standards of living?