Managing International Risk Book contents
- Frontmatter
- Contents
- List of contributors
- Acknowledgments
- Introduction and overview
- 1 Managing risks to the international economic system
- Perspective: Political threats to the international economic system
- Perspective: The crisis of exogeneity, or our reduced ability to deal with risk
- 2 Country risk: economic aspects
- 3 Political risk: analysis, process, and purpose
- 4 Country risk: social and cultural aspects
- Perspective: The risks of lending to developing countries
- Perspective: Country risk, a banker's view
- Perspective: Managing country risk for a manufacturing corporation
- 5 Organizational and institutional responses to international risk
- Perspective: Organizational strategies for coping with country risk
- 6 Insuring against country risks: descriptive and prescriptive aspects
- Perspective: Country risk insurance, an insurer's view
- Index
3 - Political risk: analysis, process, and purpose
Published online by Cambridge University Press: 07 May 2010
- Frontmatter
- Contents
- List of contributors
- Acknowledgments
- Introduction and overview
- 1 Managing risks to the international economic system
- Perspective: Political threats to the international economic system
- Perspective: The crisis of exogeneity, or our reduced ability to deal with risk
- 2 Country risk: economic aspects
- 3 Political risk: analysis, process, and purpose
- 4 Country risk: social and cultural aspects
- Perspective: The risks of lending to developing countries
- Perspective: Country risk, a banker's view
- Perspective: Managing country risk for a manufacturing corporation
- 5 Organizational and institutional responses to international risk
- Perspective: Organizational strategies for coping with country risk
- 6 Insuring against country risks: descriptive and prescriptive aspects
- Perspective: Country risk insurance, an insurer's view
- Index
Summary
The capitalist himself is a practical man, who, it is true, does not always reflect on what he says outside his office, but who always knows what he does inside the latter.
– K. Marx Capital, ch. 5What is political risk?
Political risk and international political risk
“Bet only on winners, and try to get your bets in after the horse is past the post.” This is sound advice for those who like to win. The only problem is how to follow the advice.
Large firms and even private individuals face political risk in their own country by the mere fact that they exist in a political environment. Many in Hitler's Germany who ended their lives in extermination camps predicted in 1933 that they could deal with the new regime. The comings and goings of Franco, Peron, Mobutu, Amin, and many others influenced the immediate lives and fortunes of individuals and corporations far more than the fluctuations of the stock markets or the economy in general.
Ben Franklin noted that man is rarely more innocently engaged than when he is devoting his time to making money. The economic world, rough as it may be, is considerably gentler and more predictable than the world of power. And the world of politics is the world of power. Individuals and corporations who ignore economic planning and prediction may end up poorer if luck fails to smile.
- Type
- Chapter
- Information
- Managing International RiskEssays Commissioned in Honor of the Centenary of the Wharton School, University of Pennsylvania, pp. 109 - 138Publisher: Cambridge University PressPrint publication year: 1983
- 7
- Cited by