Natural resource dependence is measured by the
share of natural capital in national wealth in 1994 – i.e., the share of
natural capital in total capital, which comprises physical, human and natural
capital (but not social capital). The natural capital variable used here is
close to the source: it is intended to come closer to a direct measurement of
the intensity of natural resources across countries than the various proxies
that have been used in earlier studies, mainly the share of primary (i.e.,
nonmanufacturing) exports in total exports or in gross domestic product and the
share of the primary sector in employment or the labor force. The latter proxies
may be prone to bias due to product and labor market distortions.
For more on the relationship between natural
resources and growth, see, for example, the papers listed here.
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