Which city lags far behind its neighbor due to its political and economic system?

Pyongyang

Explanation:

Compared to its neighbors in south Korea, the city of Pyongyang is considerable poorer with very lagging technological development.

This situation is caused by an authoritarian government that took control of north chorea. They adopted a communistic economic system and prevented the people to actually own private property.  The government also eliminate all the possibilities for the citizens to receive information from outside the country and prevented the people learn about the rest of the world.

As a result, this kill all incentives for research , production, and development .