Seminar in International Risk Analysis and Management
A. Introduction
This course is designed to offer graduate students with better understanding of
political risk, business risk. Grounded on the proposition that bad economics
makes good politics, the more that condition prevails in a country, the greater is
the magnitude of political risk. A standard definition of political risk is the
possibility that political decisions or events in a country—usually a developing
country—will affect the business climate in such a way that investors will lose money (and
possibly their assets) or not make as much money as they expected when the investment was
decided. The focus may be on the general political climate, specific political
conditions or on specific political and social variables. The primary objective of
political risk analysis is to forecast losses. A secondary objective that follows
from the first is to suggest means of managing the risk or avoiding the loss.
“Analysis” in this context is, more often than not, low tech and unpretentious. It
typically involves, first and foremost, conceiving “risk” in terms of the political
decisions, outcomes or events that can jeopardize the value or the operation of an
investment overseas. What is usually missing is any discussion of the political
arrangements that create incentives for political leaders to promote economic
growth or to undermine the prospects for prosperity.
1. Organization Meeting: What is Risk?
I.
Financial Crisis and Global Systemic Risk
2. The Origin and Aggravation of 2007 Financial Crisis
3. Global Systemically Important Financial Institutions
4. Credit Rating Agency
II.
Risks Associated with International Investment
5. International Project Finance
6. Political Risk & Management
III.
The Political Economy of Political Risk
7. The Social Foundations of the Political Risk Environment
8. The Political Economy of Political Risk
9. Defining and Operationalizing Political Risk
IV.
Political Risk and Government Performance
10. Political Risk and the Performance of Government
11. Governance, Patronage and Political Risk
12. Political Risk and Government Instability
V.
Generating Information and Data
13. The Foundation of Political Risk: Quantified Judgment
14. Validating Alternative Risk Assessments
15. Country Risk and Creditworthiness
16. Sovereign Credit Ratings
17. Student Presentation 1
18. Student Presentation 2