Government decisions and socio-economic factors can have a major impact on both governments and businesses. While it has been clear for a long time that government decisions impact the stability and security of other countries, a number of recent, high-profile political events have significantly impacted financial markets and heightened the private sector's sensitivity to political risk issues. The political-economic crisis in Europe, revolutions and rebellions in North Africa and the Middle East, and tensions in the South China Sea and Persian Gulf pose significant challenges to leaders in both government and business.
Political risk is any event that can directly or indirectly alter the value of 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 are what make political risks difficult to analyze and forecast.
The foundation to good analysis of political risks is critical thinking and sound decision-making processes. As such, the course will begin with an examination of decision-making best practices and how analysts can effectively deal with uncertainty and complexity. The fundamentals of forecasting will also be addressed in the first part of the course. The course will then cover the various types of political risks and analytic methods for assessing these risks. Students will use the analytic methods covered in the course in their written assignments. Case studies will also be used during class sessions to test the analytic methods that are covered in the course.
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.