Buried several hundred pages into a new World Economic Forum report on global tourism, past the sections on air travel infrastructure and physician density (by which they mean the number of physicians per capita, not the mass-per-cubic-meter of individual doctors), are some very interesting numbers. The WEF has compiled survey data from 140 countries estimating the attitude of each countries’ population toward foreign visitors.
The results, mapped out above, seem significant beyond just tourism. Red countries are less welcoming to foreign visitors, according to the data; blue countries are more welcoming. Click the map (or here) to enlarge the image.
The WEF gathered the data from late 2011 through late 2012 by asking respondents, “How welcome are foreign visitors in your country?” The WEF explains that the survey results are meant to help “measure the extent to which a country and society are open to tourism and foreign visitors.”
According to the data, the top three most welcoming countries for foreigners are, in order: Iceland, New Zealand and Morocco. Other high-ranking countries include the rich and peaceful of the Western world (Ireland, Canada, Austria), a few tourist havens (Thailand, United Arab Emirates), and, for some reason, big parts of West Africa.
The three countries least welcoming to foreigners are, in order: Bolivia, Venezuela and Russia. Other poorly ranked countries include the more troubled states of the greater Middle East (Iran, Pakistan, Saudi Arabia), Eastern Europe and two East Asian states I was very surprised to see so near the bottom: China and South Korea.
Part of what makes these data so interesting is that there is no easy “grand unifying theory” that I can see, no single variable that explains the outcomes. It’s not wealth or GDP per capita: that would not explain why South Korea ranks so low, or the variance among rich Western states. It’s certainly not the number of foreign visitors: the mid-ranking United States and low-ranked China have some of the world’s highest rates of foreign tourism.
If anything, maybe what’s interesting about this map is the degree to which it seems to cut against common American perceptions of the world. Although there are definitely some Middle Eastern states in the red here, the region actually scores pretty well. Tourism-friendly Morocco is no surprise, but you might not have expected to see Yemen ranked above Sweden and Belgium.
Western Europe is generally friendly toward foreigners but, perhaps because of the touchy politics around immigration there, ranks alongside much of sub-Saharan Africa. The United States, the land of the Statue of Liberty and “give us your tired, your poor, your huddled masses yearning to breathe free,” ranks 102nd out of 140 countries, well below much of the Middle East.
One thing I’m struck by, in trying to puzzle out this map, is the apparent correlation between unfriendliness to foreigners and nationalism. That would maybe help to explain the low ratings for China and South Korea (although there are other possible factors here, including race) and for Russia. It might also help to explain why the United States, Germany and Japan — three countries with strongly nationalist histories — rank below other wealthy nations.
The nationalism theory makes a bit more sense when we look region-to-region. In Latin America, for example, a region generally friendly to foreigners, three countries stand out: Bolivia, Ecuador and Venezuela. All three have governments that could be fairly described as nationalistic. It also makes some sense in the Middle East, where Saudi Arabia and Iran rank poorly among countries that generally court foreign tourism.
But there are reasons to think my theory might be wrong: it doesn’t explain why Denmark, a rich Western European country, is so much redder than its neighbors, for example; nor does it explain the variation in southern Africa.
We know that leading up to the Great Financial Crisis Goldman Sachs used Accounting Control Fraud to make big profits for itself and its executives. Unfortunately, the fraud has been overlooked by both the White House and the Department of Justice in the interests of the banks’ not failing. It does not seem to matter that millions of ordinary people have lost their pensions and savings because of this banks’ actions.
Here’s another reminder of what accounting control fraud looks like:
Goldman Sachs: Doing “God’s Work” by inflicting the Wages of Sin Globally
The central point that I want to stress as a white-collar criminologist and effective financial regulator is that Goldman Sachs is not a singular “rotten apple” in a healthy bushel of banks. Goldman Sachs is the norm for systemically dangerous institutions (SDIs) (the so-called “too big to fail” banks). Impunity from the laws, crony capitalism that degrades democracy, and massive national subsidies produce exceptionally criminogenic environments. Those environments are so perverse that they produce epidemics of “control fraud.” Control fraud occurs when the persons who control a seemingly legitimate entity use it as a “weapon” to defraud. In finance, accounting is the “weapon of choice.” It is important to remember, however, that other forms of control fraud maim and kill thousands.
Large, individual accounting control frauds cause greater financial losses than all other forms of property crime – combined. Accounting control frauds are weapons of mass financial destruction. One of the crippling flaws of the World Economic Forum (WEF) is ignoring private sector control frauds. Control fraud makes a mockery of “stakeholder” theory. Accounting control fraud, for example, aims its stake at the heart of its stakeholders. The principal intended victims are the shareholders and the creditors (which includes the workers). Other forms of control fraud primarily target the customers. If the WEF wishes to effectively protect stakeholders it is imperative that they undertake a sea change and make the detection, prevention, and sanctioning of control fraud one of their central priorities. WEF does the opposite, it wishes away fraud with propaganda because the alternative is to admit that many of its dominant participants are the central problem – they are degrading the state of the world. In 2012, in response to endemic, elite financial frauds, the WEF declared the following without citation or reasoning in its 2012 report on “Rethinking Financial Innovation.”
6.1.1 Consumer Disservice
Malfeasance and outright fraud [in finance] are extraordinarily damaging but also, fortunately, extremely rare.
This passage Report demonstrates that WEF was unable to escape its dogmas and conduct a fundamental rethinking of what caused the crisis. In a criminogenic environment fraud is common, not “rare.” That is an empirical fact if one has competent investigators. The national commission to investigate the savings and loan debacle found that control fraud was “invariably” present “at the typical large failure.” We obtained over 1000 felony convictions in cases designated as “major” by the Justice Department. The (2001) Nobel Laureate in Economics, George Akerlof and Paul Romer published their classic article in 1993 entitled “Looting: the Economic Underworld of Bankruptcy for Profit” explaining accounting control fraud. Akerlof and Romer emphasized five points:
They had supplied the missing economic theory of control fraud, so economists no longer had an excuse for ignoring such frauds
The regulators in the field recognized that deregulation was “bound” to create widespread fraud because it created a criminogenic environment in which fraud paid
Accounting control fraud was a “sure thing” – if lenders followed the fraud “recipe” three results were certain: (a) the bank would promptly report record (albeit fictional) profits, (b) the controlling officers would promptly be made wealthy by modern executive compensation, and (c) the bank would suffer catastrophic losses
If many banks in the same area followed the same strategy the result would hyper-inflate a bubble and delay loss recognition because bad loans could be refinanced, and
Now that we had an economic theory confirming that the field regulators had gotten it right from the beginning the economists could prevent future fraud epidemics if they supported the regulators rather than pushing deregulation
The accounting control fraud recipe for a lender has four “ingredients”:
Grow like crazy by
Making really crappy loans at a premium yield, while
Employing extreme leverage, and
Providing only trivial reserves for the inevitable, massive loan losses
Akerlof had identified another control fraud variant – anti-purchaser fraud – in his seminal article on markets for “lemons.” He identified a critical principle in that article – the “Gresham’s” dynamic. Akerlof explained that if a seller gained a competitive advantage over his honest competitors through fraud market forces would become perverse and “bad ethics would drive good ethics from the marketplace.”
WEF has been acting for decades to make banking criminogenic. They have pushed the three “de’s” – deregulation, desupervision, and de facto decriminalization. They have favored executive compensation systems. They have pushed for ease of entry. And they have spread the myth that fraud by corporate elites is “rare.” WEF has optimized the intensely criminogenic environments that produce recurrent, intensifying fraud epidemics, bubbles, and financial crises.
WEF’s complacency about accounting control fraud has led to its embarrassing failures in finance. It’s “competitiveness” scales and “financial market development” scales have praised the most criminogenic financial systems – Iceland, Ireland, the UK, the U.S., and Spain – even as the largest banks in those Nations were (in reality) destroyed along with the much of the national economy. Similarly, the WEF’s “global risks” series has proven unable to identify the major financial risks until the hurricane has roared through the system. The central problems are the same – the WEF “stakeholder” premise and the WEF’s domination by powerful corporations is an elaborate propaganda apparatus that assumes away the reality of how CEOs running control frauds use compensation (and the power to hire, promote, and fire) and political power to deliberately create the perverse incentives that produce widespread fraud. The irony is that the WEF’s dogmas have encouraged elite frauds to drive stakes through the stakeholders.