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Classes of Political Risk. Types
Annalisa Cordoba, Manager, Spain, Member
There turn out to be no less than 10 types of political risk. I stumbled on this useful list and thought I'd share it since this is a risk management forum.
| 1. GEOPOLITICS |
Interstate wars, great power shifts, multilateral economic sanctions, and interventions |
| 2. INTERNAL CONFLICT |
Social unrest, ethnic violence, migration, nationalism, separatism, federalism, civil wars, coups, and revolutions |
| 3. LAWS, REGULATIONS, POLICIES |
Changes in foreign ownership rules, taxation, environmental regulations, and national laws |
| 4. BREACHES OF CONTRACT |
Government reneging on contracts, including expropriations and politically motivated credit defaults |
| 5. CORRUPTION |
Discriminatory taxation and systemic bribery |
| 6. EXTRATERRITORIAL REACH |
Unilateral sanctions and criminal investigations and prosecutions |
| 7. NATURAL RESOURCE MANIPULATION |
Politically motivated changes to the supplies of energy and rare earth minerals |
| 8. SOCIAL ACTIVISM |
Events or opinions that go viral, facilitating collective action |
| 9. TERRORISM |
Politically motivated threats or violence against persons and property |
| 10. CYBERTHREATS |
Theft or destruction of intellectual property; espionage; extortion; and massive disruption of companies, industries, governments, and societies |
Source: Condoleezza Rice and Amy Zeggart, "Managing 21st-Century Political Risk: Today's Threats are More Complicated, But the Remedies Don't Have to Be.", HBR May-June 2018, pp. 130-138.
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