Rich countries are largely rich because of the skills of their populations and the quality of the institutions supporting economic activity

Fascinating report from The World Bank, Where is the Wealth of Nations? In some ways, quite surprising to find this acknowledgement from this particular source. It is all about institutional and human capital quality.

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.