The richest countries in the world are about one hundred times wealthier per person than the poorest countries. How did such immense differences arise, and why do they continue to exist? This talk summarises various proposed solutions to this paradox of economic development, including theories emphasising culture, geography, dependency, and institutions. Drawing upon comparative historical analysis, formal models, and statistical evidence, the talk argues that the quality of political and economic institutions ultimately explains most of the differences in development outcomes between countries. It concludes by considering implications for the effective altruism movement. James Fodor is a PhD student in the Decision, Risk and Financial Sciences Program. He completed graduate studies in physics and economics at the University of Melbourne, and a masters degree in neuroscience at the Australian National University. He has also worked as a research assistant in structural biology at Monash University. Outside of research, James has a keen interest in science, philosophy, and critical thinking. He is passionate about Effective Altruism, including causes such as global poverty and animal welfare.