Gylfason et al., 1999; Gylfason, 2001, 2004). For example, partial cross-country correlations
for oil exporters in the Arab world and elsewhere suggest that resource dependence is
associated with less non-resource exports and foreign direct investment. Evidence of a sample
of 87 countries suggest that resource wealth is associated with less openness to foreign trade
and less openness to gross foreign direct investment, which in turn may harm growth
prospects. Also, in a sample of 85 countries the share of natural resource wealth in national
capital is negatively correlated with both gross domestic investment as percentage of GDP
and the average ratio of broad money (M2) to GDP (a measure of financial development).
Furthermore, although there are exceptions such as Botswana, there is an inverse correlation
between resource dependence and school enrolment at all levels, expected years of schooling
and public spending on education. This may matter as there is a positive correlation between
education and growth. Finally, empirically there is a positive correlation between natural
resource dependence and macroeconomic volatility and a negative correlation between
macroeconomic volatility and growth (e.g., van der Ploeg and Poelhekke, 2009). These partial
correlations are not inconsistent with the suggestion that resource dependence crowds out
foreign, social, human, real and financial capital, each effect tending to depress growth.
2.4. World Bank data on natural capital and wealth of nations
Various components of national wealth for the year 2000 (approximated by the present value
of sustainable consumption during 2000-25 using a social discount rate of 4 percent) have
been calculated for nearly 120 countries in the world (World Bank, 2006). Produced capital is
estimated from historical investment data with the perpetual inventory method. Natural capital
consists of subsoil assets, timber resources, non-timber forest resources, protected areas,
cropland and pastureland. Due to data problems, fisheries, subsoil water and diamonds are
excluded. The explicit value of ecosystems is not evaluated either. The value of natural capital
is estimated from world prices and local costs. Intangible capital reflects the contribution of
raw labour, human capital, R&D, social capital and other factors such as institutions and rule
of law. It is calculated residually as the excess of total national wealth over the sum of
produced and natural capital and is well explained by school years per capita, a rule of law
index and remittances per capita. For example, an extra year of schooling yields extra
intangible capital varying from $840 for low-income to $16,430 for high-income countries.
Tables 3 and 4 give a flavour of the detailed results.1 Although global wealth per capita is
$96,000, this masks huge variety across countries. The share of produced assets in total
One of the referees pointed out that these estimates of the share of resources in national wealth
include human wealth, so that countries with a high wage level such as Norway are measured as having
a relatively small fraction of their wealth in natural resources. Also, it is more difficult to control for
initial conditions than with the ratio of resource exports to GDP.