Jared Diamond Attempts to Correct Romney But Instead Proves Him Right

Jared Diamond wrote a piece in the New York Times today trying to criticize Romney's remarks (some of which he seemed to take personally as it summarized Diamond's own work) but in the process really seems to actually prove Romney right and Diamond wrong.

A different set of factors involves geography, which embraces many more aspects than the physical characteristics Mr. Romney dismissed. One such geographic factor is latitude, which has big effects on wealth and power today: tropical countries tend to be poorer than temperate-zone countries. Reasons include the debilitating effects of tropical diseases on life span and work, and the average lower productivity of agriculture and soils in the tropics than in the temperate zones.

I didn't realize that Israel and the Palestinian territories have different climates as they are both adjacent to each other and also too small to straddle different latitudes.

A second factor is access to the sea. Countries without a seacoast or big navigable rivers tend to be poor, because transport costs overland or by air are much higher than transport costs by sea.

You can't think of Israel without thinking of the Jordan river, unfortunately, by most standards, the Jordan is more of a stream than a real river and is not what most would call navigable.  Also, Egypt, right next door and in the same latitude, does have a major navigable river, the Nile.  So why does it have a GDP per capita about 20% the level of Israel's? 

A third geographic factor is the history of agriculture. If an extraterrestrial had toured earth in the year 2000 B.C., the visitor would have noticed that centralized government, writing and metal tools were already widespread in Eurasia but hadn't yet appeared in the New World, sub-Saharan Africa or Australia. That long head start would have let the visitor predict correctly that today, most of the world's richest and most powerful countries would be Eurasian countries (and their overseas settlements in North America, Australia and New Zealand).

Since Jews and Arabs both originated in the same place with a similar agricultural history, this again doesn't explain the disparities.

More importantly, Diamond even admits culture's significance:

That is not to deny culture's significance. Some countries have political institutions and cultural practices — honest government, rule of law, opportunities to accumulate money — that reward hard work. Others don't. 

So what was Jared Diamond's point again?  Wasn't that Romney's point?  That Israel's relatively honest government, rule of law and opportunities to accumulate money reward hard work?  How exactly is Romney wrong about his explanation of the differences of GDP per capita between Israel and the Palestinian territories?  Looks like he wasn't.