What is political risk?
Political risk is the risk that derives from both the decisions of government and the broader stability of a political system. It has the ability to impact company valuations and influence long term commercial planning. Political risk can emerge from any level of government – local, state or national – and at any level of decision making – political or bureaucratic.
While political risk is most often thought of in terms of country risk the reality is that firms and investors can be exposed to political risk at an industry, sector or firm level even in those countries that represent as a safe risk at the macro level. Political Monitor recognises this reality and focuses its research accordingly.