Political risk is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with reasoned foresight and investment.
Broadly, political risk refers to the complications businesses and governments may face as a result of what are commonly referred to as political decisions—or “any political change that alters the expected outcome and value of a given economic action by changing the probability of achieving business objectives.”. Political risk faced by firms can be defined as “the risk of a strategic, financial, or personnel loss for a firm because of such nonmarket factors as macroeconomic and social policies (fiscal, monetary, trade, investment, industrial, income, labour, and developmental), or events related to political instability (terrorism, riots, coups, civil war, and insurrection).” Portfolio investors may face similar financial losses. Moreover, governments may face complications in their ability to execute diplomatic, military or other initiatives as a result of political risk.
Ian Bremmer (born November 12, 1969) is an American political scientist specializing in US foreign policy, states in transition, and global political risk. He is the president and founder of Eurasia Group, a leading global political risk research and consulting firm, and a professor at Columbia University. Eurasia Group provides financial, corporate, and government clients with information and insight on how political developments move markets. Bremmer is of Armenian and German descent.
Bremmer has authored/published eight books, including the national bestsellers Every Nation for Itself: Winners and Losers in a G-Zero World (Portfolio, May 2012), which details risks and opportunities in a world without global leadership, and The End of the Free Market: Who Wins the War Between States and Corporations (Portfolio, May 2010), which describes the global phenomenon of state capitalism and its implications for economics and politics. He also wrote The J Curve: A New Way to Understand Why Nations Rise and Fall (Simon & Schuster, 2006), selected by The Economist as one of the best books of 2006.
Nassim Nicholas Taleb (Arabic: نسيم نيقولا نجيب طالب, alternatively Nessim or Nissim, born 1960) is a Lebanese American essayist whose work focuses on problems of randomness and probability. His 2007 book The Black Swan was described in a review by Sunday Times as one of the twelve most influential books since World War II.
He is a bestselling author, and has been a professor at several universities, currently at Polytechnic Institute of New York University and Oxford University. He has also been a practitioner of mathematical finance,a hedge fund manager, a Wall Street trader, and is currently a scientific adviser at Universa Investments and the International Monetary Fund.
He criticized the risk management methods used by the finance industry and warned about financial crises, subsequently making a fortune out of the late-2000s financial crisis. He advocates what he calls a "black swan robust" society, meaning a society that can withstand difficult-to-predict events. He proposes "antifragility" in systems, that is, an ability to benefit and grow from random events, errors, and volatility as well as "stochastic tinkering" as a method of scientific discovery, by which he means experimentation and fact-collecting instead of top-down directed research.