Before about 1800, the gap between the richest and poorest regions of the world was modest by modern standards. Today average incomes in the richest countries are many dozens of times those in the poorest. Explaining this great divergence is one of the central questions of social science. Four broad families of explanation compete, and most scholars combine several.

Geography

Geography shapes what is easy and what is hard. Tropical climates carry a heavy burden of diseases such as malaria. Some soils are poor, and some regions suffer frequent droughts. Countries that are landlocked or far from the sea pay high costs to trade. The economist Jeffrey Sachs has long argued, in paraphrase, that such geographic disadvantages, especially disease, poor soils and high transport costs, can trap countries in poverty unless outside investment helps them overcome these barriers. Others, such as the geographer Jared Diamond, have emphasized how geography shaped which societies developed farming, states and technology early.

Institutions

The economists Daron Acemoglu and James Robinson, in their book Why Nations Fail (2012), argued that the decisive factor is institutions, the rules that shape economic and political life. In paraphrase: inclusive institutions, such as secure property rights, fair courts and broad political participation, encourage people to invest, innovate and work. Extractive institutions concentrate power and wealth in a narrow elite that takes what others produce, which discourages effort and blocks change.

Their favorite illustration is North and South Korea: one people, one geography and one culture, split in 1945, with vastly different results under different institutions. With Simon Johnson, they also studied colonial history, arguing that where European settlers died in large numbers from disease, colonizers set up extractive institutions rather than settling, and those institutions persisted. Acemoglu, Johnson and Robinson shared the Nobel memorial prize in economics in 2024 for this body of work.

Culture

Some thinkers emphasize culture: attitudes to work, trust, saving, education and family. The sociologist Max Weber famously linked the rise of capitalism to Protestant religious ethics. Recent research finds that levels of trust between strangers do correlate with prosperity. But cultural explanations have a poor track record of prediction. In the mid-twentieth century, some Western writers blamed Confucian values for East Asian poverty; a few decades later, others credited the same values for East Asian success. Culture also changes, and is shaped by institutions and history as much as it shapes them. Careless cultural arguments can slide into stereotypes.

Colonialism and its legacies

Much of today's developing world was ruled by European powers. Colonial rule often built economies around exporting raw materials, drew borders that ignored existing communities, and left weak states and divided societies. The Atlantic slave trade removed millions of people from Africa, and some economic research finds that areas most affected by it show lower levels of trust even today. Defenders of other views note that some former colonies are now rich and that some never-colonized countries remain poor, so colonialism cannot be the whole story, though it is part of many countries' stories.

The debate

Sachs and Acemoglu have debated in print. Institutionalists argue that geography matters mostly through institutions, and that good institutions can overcome bad geography. Geography advocates reply that disease and isolation make it much harder to build good institutions in the first place. Many scholars conclude that the factors interact and that no single cause explains every case.

Worked example: one coastline, two stories

Imagine two fictional neighboring countries, Arlen and Bresk, that share a tropical coastline, a similar climate and a common language. Both were colonies until the 1960s. Today Arlen is several times richer than Bresk. How would each school of thought explain this?

A geography advocate would first check whether they really share the same conditions. Perhaps Bresk's interior has more malaria, or Arlen has the only deep-water port. If so, geography alone could explain much of the gap.

An institutions advocate would look at rules. Suppose that after independence Arlen held regular elections, protected farmers' land rights and built independent courts, while Bresk's rulers kept the colonial system of forced crop sales, seized land from opponents and ruled through a narrow group. The institutionalist would see the gap as the result.

A culture advocate might ask about trust, saving and attitudes to education. But since the two peoples share a language and many customs, cultural explanations would need to show what really differs, and whether those differences are causes or effects of different institutions.

A historian of colonialism would ask how each was ruled. Perhaps Bresk was run by a concession company that extracted rubber with forced labor, leaving a legacy of mistrust and a state built for extraction, while Arlen's colonial rulers were less brutal and left more local institutions intact.

In real cases, several of these explanations usually hold at once, and the difficult work lies in judging how much each contributes.