According to the Academic Ranking of World Universities, the world's top 500 universities are located in only 38 countries, with the USA alone having 157 of them. This article investigates the socioeconomic determinants of the wide performance gap between countries, and whether the USA's dominance is largely due to its economic power. A large amount of cross-country variation in university performance can be explained by just four socioeconomic factors: income, population size, research and development spending, and the national language. Conditional on the resources that it has, the USA is actually underperforming by about 4-10%. On the contrary, an emerging economic power, China, is rising fast in the league table as well as outperforming countries with similar levels of resources. (Contains 2 figures and 3 tables.)