Re-Evaluating The Theoretical Foundations Of Political Risk Analysis:The Crucial Role of Context

This chapter outlines the key theoretical challenges faced by political risk analysis (PRA) as a field of inquiry in light of recent geopolitical and economic developments. The first section traces the evolution of the concept of political risk from its origins to this day. The second section engages with an age-old distinction in the political risk literature, the one between “micro” and “macro” political risk, arguing that it should be used carefully in order to avoid confusion or concept stretching. This is true, especially against the backdrop of what could be defined as the “new era” of political risk analysis characterized by ‘poly-crises’, which is the subject of the third section of this chapter. The final section concludes by contending that – as the cases analyzed in the rest of the volume show – the focus of PRA theorizing should be redirected from the quest for universal models of PRA to the relevance of the context in which it is analyzed.