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Wallenberg Raoul Wallenberg was the second foreigner to be given honorary American citizenship. The first was Winston Churchill. The reason for this honor? Wallenberg helped to rescue many Jews from the horrors of concentration camps. The exact number of Hungarian Jews rescued directly by Wallenberg or as a result of his efforts is unknown. Low estimates are in the few thousands, but they go as high as 100,000. Either way, Wallenberg was responsible for the rescue of thousands of people when the Holocaust began in full in Hungary in 1944. Wallenberg was born into a life of privilege. His family had been at or near the center of Swedish politics and business since the mid-1800s. Today, the Wallenberg family owns significant parts of or controls many famous Swedish companies, including telecommunications

To be able to use rich-country methods of production requires rich-country infrastructure—roads, railways, telecommunications, factories, and machines—not to mention rich-country educational levels, all of which take time and money to achieve. Yet the gaps between rich and poor provide plenty of incentives to make the investment in that infrastructure and equipment, and, as Robert Solow showed in one of the most famous papers in all of economics, average living standards should draw closer over time.4 Why this has not happened is a central question in economics. Perhaps the best answer is that poor countries lack the institutions—government capacity, a functioning legal and tax system, security of property rights, and traditions of trust—that are a necessary background for growth to take place.

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