Culture or Institutions?

Arnold Kling on the economics of culture:

If you think that culture matters but institutions do not, look at North and South Korea. If you think that culture does not matter at all, look at differences among different ethnic groups within countries.

To which Bryan Caplan adds:

South Korea/North Korea per capita income ratio: 14. (Source: CIA World Factbook)

American Asian/American black average household income ratio: 1.9. (Source: U.S. Census)

From a global standpoint, it sure looks like economic policy (a term I prefer to the vague "institutions") matters a lot more than culture.

Read more about this photo of the two Koreas here.