Editorial: Panama Papers, Good Countries and the Reputation Crisis

Both from a strategic communication and a place reputation perspective, the last couple of days have been very revealing.

First, the “Panama Papers”* are a demonstration of collaborative investigative journalism – team work across organizations and national borders. By actively collaborating, and not just following political or PR spin, leading news media are regaining their voice and legitimacy in a mobile world prone to information overload and tweet-length attention spans.

Second, the Panama Leaks show that legal in national terms and acceptable for the international community/public opinion have become very different things in our interconnected, global world. Which puts nation-states at the brink of a legitimacy crisis. This crisis is further fueled by having members of the Royal Family (Spain), Prime Ministers (Iceland, Argentina,..), sports heroes and cultural elites participate in such dubious practices. In other words, those persons whom we used to trust most.

Third, Panama – without having done anything strictly illegal – is now suffering from the “Black Cloud Effect“: anything associated with Brand Panama will, for the time being, be linked to unethical business practices. Not a great proposition for attracting visitors, talent or for sustainable economic development.

Fourth, the Panama Papers demonstrate how the actions of a country’s political, business or cultural elite impacts not just their own, personal image, but their nation’s reputation as a whole. Thanks to such large-scale misbehavior (and someone skilled enough to hack and reveal such information), managing the brand/reputation of a place has just become a little bit more impossible.

Fifth, in a time where every internet user and smart phone owner has the means to test national PR campaigns against news headlines, countries really need to take the Good Country Index serious – if only as a way to identify performance weaknesses and reputational threats.

More than ever, we now live in what the late sociologist Ulrich Beck aptly described as a World Risk Society: a community not only connected through infrastructure systems and business transfers, but through a nervous system that reaches even the tiniest of Island (tax) paradises.

The Panama Papers probably won’t be able to do much additional harm to the image of a corruption-ridden Spain, or a Putin-dominated Russia. However, the millions of documents now being analyzed will affect most countries to some extent. Lucky those countries and nations who have been able to accumulate enough goodwill to dodge the reputation blow and avert their leaders’ legitimacy crisis.

*Not sure what the Panama Papers are about? Read this summary by the Guardian.

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Florian Kaefer

Editor at The Place Brand Observer
Independent researcher, journalist, entrepreneur. Founder and editor of The Place Brand Observer and the Sustainability Leaders Project. Follow me on Twitter or let's connect through LinkedIn.

Florian Kaefer

Independent researcher, journalist, entrepreneur. Founder and editor of The Place Brand Observer and the Sustainability Leaders Project. Follow me on Twitter or let’s connect through LinkedIn.