As I mentioned in a prior post I have been reading Why Nations Fail by Daron Acemoglu and James Robinson. The following is an interesting story from the book which further shows the difference political institutions can make in the prosperity of a nation.
"In the summer of 1945, as the Second World War was drawing to a close, the Japanese colony in Korea began to collapse. Within a month of Japan's August 15 unconditional surrender, Korea was divided at the 38th parallel into two spheres of influence. The South was administered by the United States. The North, by Russia. The uneasy peace of the cold war was shattered in June 1950 when the North Korean army invaded the South...It was then that Hwang Pyong-Won and his brother were separated...Dragged apart in 1950, they met again in 2000 in Seoul for the first time in fifty years after the two governments finally agreed to initiate a limited program of family reunification.
As a doctor, Hwang Pyong-Won's brother had ended up working for the air force, a good job in a military dictatorship. But even those with privileges in North Korea don't do that well. When the brothers met, Hwang Pyong-Won asked about how life was north of the 38th parallel. He had a car, but his brother didn't. "Do you have a telephone?" he asked his brother. "No," said his brother. "My daughter who works at the Foreign Ministry, has a phone, but if you don't know the code you can't call." Hwang Pyong-Won recalled how all the people from the North at the reunion were asking for money, so he offered some to his brother. But his brother said, "If I go back with money the government will say, 'Give that money to us,' so keep it." Hwang Pyong-Won noticed his brother's coat was threadbare: "Take off that coat and leave it, and when you go back wear this one," he suggested. "I can't do that," his brother replied. "This is just borrowed from the government to come here." Hwang Pyong-Won recalled how when they parted, his brother was ill at ease and always nervous as though someone were listening. He was poorer than Hwang Pyong-Won imagined. His brother said he lived well, but Hwang Pyong-Won thought he looked awful and was thin as a rake."