Where is the Wealth of Nations?

by Dave

Solutions are known, it is the execution/implementation which is a problem

Executive summary via World Bank

Where is the Wealth of Nations?
Answering this question yields important insights into the prospects for sustainable development in countries around the world.

Bottomline: The evidence in this volume suggests that investments in produced capital, human capital, and governance, combined with saving efforts aimed at offsetting the depletion of natural resources, can lead to future welfare increases in developing countries.

Entire report here – Measuring capital for the 21st century

1) The wealth estimates suggest that the preponderant form of wealth worldwide is intangible capital—human capital and the quality of formal and informal institutions. Moreover, the share of produced assets in total wealth is virtually constant across income groups, with a moderate increase in produced capital intensiveness in middle-income countries. The share of natural capital in total wealth tends to fall with income, while the share of intangible capital rises. The latter point makes perfect sense—rich
countries are largely rich because of the skills of their populations and the quality of the institutions
supporting economic activity.

2) the quality of development depends crucially on how wealth changes over time. Natural capital can be transformed into other forms of capital, provided resource rents are efficiently invested. The calculations show how even a moderate saving effort, equivalent to the average saving effort of the poorest
countries in the world, could have substantially increased the wealth of resource-dependent economies. Republica Bolivariana de Venezuela could have four times as much produced capital. In per capita terms, the economies of the Republica Bolivariana de Venezuela, Trinidad and Tobago, all rich in petroleum, could today have a stock of produced capital of roughly US$30,000 per person, comparable to the Republic of Korea.

3) In the richest countries it is clear that technological change, institutional innovation, learning by doing, and social capital, to name a few factors, are fundamental drivers of the economy.

4) it validates the importance of a Hartwick rule of saving the rents from the exploitation of natural resources if we are to achieve a sustained level of income generation.