Why Nations Fail

Why Nations Fail

by

Daron Acemoglu and James A. Robinson

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Nogales Symbol Icon

The divided city of Nogales represents the profound economic inequality between nations and the institutional factors driving this inequality. In the first chapter of Why Nations Fail, Acemoglu and Robinson compare how people live on either side of the border in Nogales, Arizona and Nogales, Sonora. People living on the US side earn about three times as much as those on the Mexican side for similar work. They’re also more likely to be educated and healthy. And unlike their counterparts across the border, they can trust their government to represent them democratically and provide them with basic services like clean water, safe roads, and a fair legal system.

In other words, Nogales, Arizona has a far higher standard of living than Nogales, Sonora. However, they share the same history, culture, and geography, so none of these factors can explain the differences between them. This is why Acemoglu and Robinson highlight political and economic institutions and the incentives they create: the US’s system of government gives its citizens political and economic opportunities that Mexico’s simply does not.

In fact, Nogales is really just an accessible example of the far graver inequalities that plague the world in the 21st century. Acemoglu and Robinson use it to ease their readers into a difficult topic and provide clear, intuitive evidence that institutional practices—and not geography or culture—are the real cause of global inequality.

Nogales Quotes in Why Nations Fail

The Why Nations Fail quotes below all refer to the symbol of Nogales. For each quote, you can also see the other characters and themes related to it (each theme is indicated by its own dot and icon, like this one:
Global Inequality and Economic Growth Theme Icon
).
Chapter 1 Quotes

The differences among nations are similar to those between the two parts of Nogales, just on a larger scale. In rich countries, individuals are healthier, live longer, and are much better educated. They also have access to a range of amenities and options in life, from vacations to career paths, that people in poor countries can only dream of. People in rich countries also drive on roads without potholes, and enjoy toilets, electricity, and running water in their houses. They also typically have governments that do not arbitrarily arrest or harass them; on the contrary, the governments provide services, including education, health care, roads, and law and order. Notable, too, is the fact that the citizens vote in elections and have some voice in the political direction their countries take.

Related Characters: Daron Acemoglu and James A. Robinson (speaker)
Related Symbols: Nogales
Page Number: 40-41
Explanation and Analysis:

The reason that Nogales, Arizona, is much richer than Nogales, Sonora, is simple; it is because of the very different institutions on the two sides of the border, which create very different incentives for the inhabitants of Nogales, Arizona, versus Nogales, Sonora. The United States is also far richer today than either Mexico or Peru because of the way its institutions, both economic and political, shape the incentives of businesses, individuals, and politicians. Each society functions with a set of economic and political rules created and enforced by the state and the citizens collectively. Economic institutions shape economic incentives: the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on. It is the political process that determines what economic institutions people live under, and it is the political institutions that determine how this process works.

Related Characters: Daron Acemoglu and James A. Robinson (speaker)
Related Symbols: Nogales
Page Number: 42
Explanation and Analysis:
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Nogales Symbol Timeline in Why Nations Fail

The timeline below shows where the symbol Nogales appears in Why Nations Fail. The colored dots and icons indicate which themes are associated with that appearance.
Chapter 1: So Close and Yet So Different
Global Inequality and Economic Growth Theme Icon
...first section, “The Economics of the Rio Grande,” Acemoglu and Robinson describe the city of Nogales, which is divided by the US-Mexico border. In Nogales, Arizona, most residents have at least... (full context)
Global Inequality and Economic Growth Theme Icon
The two halves of Nogales share the same geography, climate, history, and culture—the only difference is their economic and political... (full context)
Global Inequality and Economic Growth Theme Icon
History and Institutional Change Theme Icon
Cycles of Wealth and Poverty Theme Icon
Diversity, Pluralism, and Empowerment Theme Icon
...return to their book’s thesis. The world is deeply unequal, like the two halves of Nogales. People in rich countries have far better educational, health, and economic opportunities than people in... (full context)
Global Inequality and Economic Growth Theme Icon
The inequality between the two halves of Nogales is “just the tip of the iceberg.” For one, Nogales is among the wealthiest places... (full context)
Global Inequality and Economic Growth Theme Icon
The difference between rich countries and poor countries—or places like Nogales, Arizona and Nogales, Sonora—comes down to institutions and the incentives they create. Different kinds of... (full context)
Chapter 2: Theories That Don’t Work
Global Inequality and Economic Growth Theme Icon
History and Institutional Change Theme Icon
...There’s stark inequality between places that share the same geography, like the two halves of Nogales, or North and South Korea. Plus, for most of human history, the richest and most... (full context)
Global Inequality and Economic Growth Theme Icon
...For example, differences in government explain all the cultural differences between the two halves of Nogales or Korea. (full context)