Specifically, Romney was talking about the relative wealth of Israel and the absolute poverty of Palestine. He cited Guns, Germs, and Steel and The Wealth and Poverty of Nations, meaning he did the required reading for my first semester macro class (well, that and Romer's Advanced Macroeconomics, but I'm just talking about the reading I actually read). He points out that, when the land's the same, it's got to be the culture that's to blame.
"Not so fast!" claim the overexercised. "Acemoglu and Robinson say it's institutions that are to blame!"
Are not institutions a result of culture? If you have a culture of corruption, you have corrupt institutions. If you have a culture of transparency, you have transparent institutions.
The different outcomes seen in Nogales, Arizona, and Nogales, Sonora, are seen as proof that culture's not to blame. To which I ask, why can't American Hispanics have a very different culture from Mexican Hispanics? The Nogales/Nogales example is tacitly saying of two different groups of Hispanics, "You guys are pretty much all the same to me." That seems much more racist than suggesting, as I take Romney's criticism to say, "When you glorify violence and victimization, you get violent victims. If you want productivity, you start by being productive."