New publication: Political risk and the commercial sector – Aligning theory and practice

In a new article in Journal of Risk Management I try discuss connection between political risk analysis in the commercial sector and political science. How well equipped are modern firms to navigate the turbulent political world? And what can they learn from the study of politics?

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The Arab Spring and the euro crisis have shown that political factors and events can make or break markets overnight, making them of increasing importance to commercial actors when investing abroad. Expropriation, sovereign default, societal unrest and terrorism are examples of political risks that have considerable implications for business conditions. They are also societal acts that political scientists have long been analyzing using a diverse toolbox of models, theories and methods. However, with a few exceptions, political risk management within commercial entities – in as far as it takes place at all – seems to rest on either anecdotal knowledge or crude quantitative macroeconomic data. This article tries to bridge the gap between risk management and the study of politics. It starts by analyzing the concepts and methods underpinning commercial risk management and continues with an investigation of contributions from relevant fields of political science. The aim is to contribute to the craft of risk management and the conceptual understanding of political risk.

The article can be downloaded for free here.

The European Union and the Paris attacks

With some time passing following the terrorist attacks in Paris earlier this month, focus is being directed to the EU and its role in counter-terrorism.  Typical suggestions coming from Brussels nowadays are 1) member states must send more and better intelligence to relevant EU agencies, 2) EU agencies must work better together and 3) EU agencies must cooperate better with actors in 3rd countries. Interestingly, these are the very same arguments that was heard in Europe following the 9/11 attacks, after the Madrid train bombings in 2004 and again after the London attacks. Decision-makers in Brussels clearly are not getting what they ask for. Why? Because the practitioners (for several reasons) are less enthusiastic and because some member states are hesitant. I discussed this issue in an article (here) for Intelligence and National Security in 2010, but the problem is the same today.

Together with some colleagues, I also discussed what the EU could do in a resent piece, available here

A letter from Stockholm

“The governing coalition of Social Democrats and Greens that entered office in October 2014 has presented a foreign policy agenda with a level of ambition rivaled only by the cost of its possible failure.”

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I review Swedish foreign policy at Carnegie’s Strategic Europe blog. Read it here!