Conceptualizing, Analyzing and Measuring Political Risk: The Evolution of Theory and Method

Abstract

This paper analyses the concept of political risk, its evolution and conceptualisation, and explores its utility as a means of understanding political events and processes that can threaten order, stability and continuity in International Relations and disrupt the normal practices of inter-state investment, trade and commerce. More particularly, the article organises the disparate literature that surrounds the concept of political risk such that it might be more rigorously applied as a social science method for understanding political events and their effects upon commercial and strategic activities.

Keywords: Political risk, multinational enterprise, foreign direct investment

JEL Classification: B30, B31,