THORVALDUR GYLFASON
This chapter analyses the Nordic countries as relatively late industrializers and asks what evidence there is that resource abundance continues to affect their economic performance. Since about 1970, the Nordic economies generally have grown less rapidly than those of many other industrial countries have. Their living standards have also diverged from one another: they were approximately the same around 1990, but that is no longer the case. In 1997 for example, Norway's ppp-adjusted per capita GNP, the highest in the group, was 28 per cent higher than that of Sweden, the lowest, compared with a difference of less than 1 per cent in Sweden's favour, in 1990 (World Bank 1999). If we gauge living standards by ppp-adjusted GDP per hour worked, a better measure because it mirrors labour productivity, then we find a 25 per cent difference between Norway and Sweden, a 35 per cent difference between Norway and Finland, and a difference of about 50 per cent between Norway and Iceland (Table 18.1).
It is not enough, however, to look at current income flows and the hours of work necessary to sustain them in order to assess the wealth of nations and their living standards. It is also necessary to view the underlying trends, including the status and movement of key macroeconomic stock variables like natural-resource endowments, including the environment, and other national assets and liabilities. However, many of these assets and liabilities—natural-resource endowments and social capital among them—are notoriously hard to measure. Table 18.2 shows the World Bank's estimates of the level and composition of total ppp-adjusted national wealth per person in 1994 in the Nordic countries (all but Iceland). According to these estimates, the national wealth of each of the Nordic countries is above the West-European average, but below that for North America. Human capital is by far the most important component of wealth everywhere. The share of natural capital is accordingly small everywhere, ranging from 4 per cent in Denmark to 10 per cent in Norway. Natural resources
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