People all across the world are just the same. Granted there are cultural, geographical, climatic, water and mineral endowment differences among various nations but those differences are not as stark as the differences in economic performance and the level of prosperity. A Somali (2021 annual per capita income of $130) is not by mere nature and nurture alone 645 times less capable of producing wealth compared to a Swiss (2021 annual per capita income of $83,832).
What factor determines the relative differences in the wealth of nations? Much of it is explained by the quality of the institutions that nations have. The most critical institution is the government. If the government is incompetent, meaning if the quality of the people in government is poor, then it is unlikely that the people would flourish. There’s no escaping that dismal conclusion. Incompetence in government is fatal for a nation. Continue reading