The risks of current political risk management

Abstract

Political risk is a concept traditionally related, on the one hand, to the rational calculation of risk in economic activities and, on the other, to a particular historical moment in which it has taken on the characteristics of an autonomous research field. Risk calculation and the management of lucrative activities have illustrious precedents. At the beginning of the 20th century, Max Weber pointed out the necessity to forecast all the possible risks that come from non-economic factors (such as bureaucracy, uncertainty of law and administrative procedures, and so on) before carrying out an economic investment leading to profit (Weber, 1968). However, the actual starting point of a science, related to the management of political risk, dates back to the 1960s (Sottilotta, 2013). The historical context in which this shift occurred can be found in the Cold War and the decolonization era.