Acemoglu And Nogales, Arizon A Comparative Analysis
Acemoglu and Robinson (2012) have as a first example two cities, which are somehow in a similar situation like North and South Korea. They are also next to each other with similar climate and the only difference between the two countries are that while Nogales, Sonora is in Mexico, Nogales, Arizona is in the United States. Thus, the authors argue that in cases like this, the only explanation for the differences in their economic performance can be made through explaining their different political systems. They describe that Nogales, Arizona is a part of the States, which also means that they take advantage of the well developed economic and political institutions that encourages them to do business and develop the production. They have also the possibility to access great education and health systems and they might have an active part in the democratic process, such as elections. On the other hand, Nogales, Sonora is in Mexico, which is part of the Mexican institution system, where corruption is well known and therefore provide less incentive for businessmen to invest (Acemoglu & Robinson, 2012, p. 25-29).
However, I would like to note that even though in Nogales, Sonora the average income of a household is one-third of Nogales,
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