The Soviet Union built the Berlin Wall separating communist East Germany from democratic West Germany because the fence they erected was not doing its job.  Yes, it started as a fence and over time became a wall. The Soviet Union's offical reason was that it wanted its borders identified, and to guard against intruders. The great irony of their offical reason was that  intruders trying to get in was not the problem, the problem was trying to keep people on "their" side of the wall.

After the end of WWII, Germany was divided into four parts, each part to be controlled by one of the Allied countries: the U.S., Britain, France, and the Soviet Union.  As tension between the democratic countries and the communist USSR grew during the cold war, Germany was divided into just two parts: the Federal Republic of Germany, with West Berlin, and the German Democratic Republic, with East Berlin. 

The west was democratic and capitalist.  The east became an authoritarian government with a Soviet-styled economy.  The West Germans economy flourished, making many East Germans wanting to move into those areas.  To prevent this, the government established a clear border in Berlin, and stopped East Germans from moving into the west.

Stalin met with East German leaders and expressed his displeasure that westerners could still move freely in the east.  Stalin advised the East Germans as follows: "The demarcation line between East and West Germany should be considered a border – and not just any border, but a dangerous one ... The Germans will guard the line of defense with their lives."

The reason Stalin was so firm on this was a logical one.  He was trying to protect his power.  The more access citizens of authoritarian countries had with those of free countries, the more the feeling of unrest could grow, which would topple the dictators.  This did eventually happen - just not for another 20 + years.