Political Risk

Political risk refers to the probability of loss for commercial market direct investment activity that can be attributed causally to noncommercial, or specifically governmental, politically motivated events or decisions. Originally, and still often, termed country risk or sovereign risk by analysts and business leaders, the events or decisions at issue are traditionally related to concerns surrounding the likelihood of expropriation or nationalization of a single business or an entire industry, currency inconvertibility or restrictions on convertibility, restrictions on transfer or repatriation of profits, and war or civil disturbances, related to a government’s activities or decrees. Additional, more recent concerns include a wide range of nonmarket and government-sanctioned or officially sponsored episodes, such as restrictions on export of goods or services produced, corruption (including but not ...