Contents

Preface

Why Egyptians filled Tahrir Square to bring down Hosni Mubarak and what it means for our understanding of the causes of prosperity and poverty

1. So Close and Yet So Different

Nogales, Arizona, and Nogales, Sonora, have the same people, culture, and geography. Why is one rich and one poor?

2. Theories That Don't Work

Poor countries are poor not because of their geographies or cultures, or because their leaders do not know which policies will enrich their citizens

3. The Making of Prosperity and Poverty

How prosperity and poverty are determined by the incentives created by institutions, and how politics determines what institutions a nation has

4. Small Differences and Critical Junctures: The Weight of History

How institutions change through political conflict and how the past shapes the present

5. "I've Seen the Future, and It Works": Growth Under Extractive Institutions

What Stalin, King Shyaam, the Neolithic Revolution, and the Maya city-states all had in common and how this explains why China?s current economic growth cannot last

6. Drifting Apart

How institutions evolve over time, often slowly drifting apart

7. The Turning Point

How a political revolution in 1688 changed institutions in England and led to the Industrial Revolution

8. Not on Our Turf: Barriers to Development

Why the politically powerful in many nations opposed the Industrial Revolution

9. Reversing Development

How European colonialism impoverished large parts of the world

10. The Diffusion of Prosperity

How some parts of the world took different paths to prosperity from that of Britain

11. The Virtuous Circle

How institutions that encourage prosperity create positive feedback loops that prevent the efforts by elites to undermine them

12. The Vicious Circle

How institutions that create poverty generate negative feedback loops and endure

13. Why Nations Fail Today

Institutions, institutions, institutions

14. Breaking the Mold

How a few countries changed their economic trajectory by changing their institutions

15. Understanding Prosperity and Poverty

How the world could have been different and how understanding this can explain why most attempts to combat poverty have failed

Acknowledgments

Bibliographical Essay and Sources

References

Index