Why Nations Fail – Daron Acemoglu & James A. Robinson

This influential work of political economy argues that the primary difference between wealthy and poor nations is not geography, culture, or climate, but "institutions." The authors distinguish between "inclusive" institutions, which encourage innovation and broad participation, and "extractive" institutions, which concentrate power and wealth in the hands of a few. Using historical examples, they demonstrate how institutional choices determine long-term national success.