What determines the economic development of states and societies? This fundamental research question has spawned a wealth of economic theories over the past two centuries or so. This article analyzes the most notable of these theories and assesses a new concept by Daron Acemoglu and James A. Robinson, developed in their 2012 bestseller Why Nations Fail? The Origins of Power, Prosperity and Poverty. Our analysis and in-depth literature studies show that single-factor theories are rare; most authors list a combination of factors that they believe are crucial to economic development. Another finding is that proposed theories range from those that focus on various components of the natural environment (different variations of “geographical hypothesis”) to those that put the emphasis on human-related factors (various forms of “institutional hypothesis”). Acemoglu and Robinson’s concept can largely be viewed in institutional terms, though the researchers themselves make a distinction between institutional and cultural hypotheses rather than institutional and geographical. Their distinction suggests that institutions can be seen as independent of their cultural context, which appears to be in conflict with the researchers’ overall line of reasoning and detracts from their theory.