The town of Nogales is divided by a fence: on the north side is the United States, and on the south side, Mexico. And the inhabitants on the northern side face lower crime rates, live longer and earn three times as much as their southern neighbours.

Leading academics Daron Acemoglu and James A. Robinson set out to answer how two places - which share an ethnic background, a geographical location and a climate - could be so different. Their compelling and elegantly argued new theory reveals that to prosper, citizens need 'inclusive institutions' which create virtuous circles of innovation, economic expansion and more widely-held wealth.

Based on fifteen years of research, and answering the competing arguments of authors ranging from Jeffrey Sachs to Jared Diamond, Why Nations Fail blends economics, politics and history to provide a powerful and persuasive way of understanding wealth and poverty.