Now that the State Department has downgraded “rogue states” to “states of concern,” it’s hard to know what to call the 35 countries and territories identified as sleazy tax havens in a new report by the Organization for Economic Cooperation and Development. (To read the report, which requires Adobe Acrobat, click here. To read the press release, which does not, click here.) As Joseph Kahn points out in the June 27 New York Times, nearly all the tax havens are islands, as were most of the jurisdictions on a separate international list of potential money-laundering havens that Kahn reported on in a June 23 story. What is it about island nations? Why can’t they behave? Here are a few possible explanations:
Island nations depend heavily on tourism. When life revolves around pleasing rich people from other countries, it’s a short hop from asking if you can freshen that drink to asking if you can park that $3 million in a tax-free account.
Island nations are poor. Because islands are small, island economies tend to rely on just a few crops and other exports. They have to import a lot. Perpetually strapped for cash, they have to be less scrupulous about how they attract capital.
Island nations are often in warm places. Tropical climates and corruption often go hand in hand. Though this doesn’t explain how the Isle of Man got on the list.
People living in island nations tend to live longer. At any rate, that’s what it says on this population Web site. Presumably it’s because they eat all that healthy fish. The longer people live, the less fussy they become about how they earn their money.
Island nations are more vulnerable to hurricanes and the effects of global warming. When natural disasters loom large in life, arcane subjects like sound accounting practices take a backseat.
As you can see, Chatterbox is groping for answers. Readers with better explanations are urged to e-mail chatterbox@slate.com.
