Last month the World Bank published a report titled, “Where is the Wealth of Nations?” (HT: From the Heartland). The report
describes estimates of wealth and its components for nearly 120 countries. The book has four sections. The first part introduces the wealth estimates and highlights the level and composition of wealth across countries. The second part analyzes changes in wealth and their implications for economic policy. The third part deepens the analysis by considering the importance of human and institutional capital, and by linking wealth to production. The fourth part reviews existing applications of resource and environmental accounting in developed and developing countries.
Also out recently is an index of the most globalized nations by Foreign Policy (HT: International Civic Engagement). The top ten, based on 2005 data, which claims to “measure countries on their economic, personal, technological, and political integration”:
- Singapore (252,607)
- Hong Kong (NR)
- Netherlands (421,389)
- Switzerland (648,241)
- Ireland (330,490)
- Denmark (575,138)
- United States (512,612)
- Canada (324,979)
- Jordan (31,546)
- Estonia (66,769)
In parenthesis after the name of the country in the top ten, I’ve placed the total wealth estimate for the year 2000 from the World Bank report (appendix 2 PDF).
Look at Estonia, for example. Even though its total wealth score is much smaller relative to other nations on the globalization list, the majority of its wealth score (41,802) in the World Bank report is garnered from “intangible capital,” which refers to, as the From the Heartland blogger put it, “the value of the nation’s economic and political institutions,” such as the rule of law. And now compare Estonia with the Republic of Congo, which has almost the same ratings in terms of tangible capital as Estonia, but whose -12,158 intangible capital rating keeps its total wealth score disturbingly low (3,516).
Clearly it isn’t the case that countries that only have rich natural resources have something to offer the international marketplace. Strong and responsible economic and political institutions can foster intellectual creativity, technological innovation, and social capital that more than makes up for deficits in natural resources.