The authors begin with a description of two different situations in the same city, Nogales, which has been cut in half by a fence. The north part of Nogales belongs to Santa Cruz County, Arizona, United States. The average household income there is about $30,000 per year. The education system is great, for most adults they have high school degrees, and almost all the teenagers are in school. In addition, social services like medical care, electricity, and road networks to other parts of the states are all provided by the government. The most important is there is law and order in Nogales, Arizona that people do not need to worry about the safety for their daily activities (Acemoglu & Robinson, 2012). However, the life in the south part of Nogales, which located in Sonora, Mexico, is quite different. Even though Nogales is a relatively rich part of Mexico, the average household income is only about one-third of that in Nogales, Arizona. The majority of the adults are not high school graduates, and a lot of teenagers do not have the chance to go to school. Many social services are not provided for the population, and the public health conditions are very poor there. Last but not the least, law and order in Nogales, Sonora is also in a bad condition. The crime rate is high, and residents there always worry about theft, or expropriation (Acemoglu & Robinson, 2012). Under the same geography and climate conditions, why two halves of the one city has such huge differences becomes a considerable question.