Political risk is a government decision or socio-economic change that can directly or indirectly alter the value of a business (or an economic asset) or significantly impact the security or economic wellbeing of a nation. The complexity of the international system as well as incomplete information about the intentions of the actors in the system make political risks difficult to analyze and forecast. Current examples of political risks that pose significant challenges to leaders in both business and government include: the political-economic situation in Europe, conflict in the Middle East, tensions in the South China Sea and political uncertainties in South America.
The first part of this course will focus on decision-making/analytic best practices, how analysts can effectively deal with uncertainty and complexity, and the fundamentals of forecasting. The course will then cover the various types of political risks and analytic methods for assessing these risks such as risk mapping, systems analysis, scenarios development, and game theory. Students will use the analytic methods covered in the course in their written assignments.
The course will be taught in a combined lecture-seminar format. Students will be expected to complete all assigned readings before each class and be prepared to discuss them during the seminar portion of class. Students also will be encouraged to venture beyond these readings and to pursue research topics of interest to them.
Students will become familiar with the history and evolution of political risk analysis. They will understand the many types of political risks, the different levels of political risk (global, country, firm/sector), and be able to use different analytic methods to assess and forecast political risks.
Through course readings, class discussions, and the examination of case studies, students will gain a solid understanding of contemporary political risks that challenge governments and businesses. They will also have a chance to practice applying various analytic methods to contemporary political risk issues in their written assignments and classroom discussions.