Political Risks in the Era of Global Challenges to Traditional Governance Structures

After many years of general disregard political risks are back as a major threat to international business. Though the phenomena are not new, today’s political risks are rather different from those studied in the aftermaths of the Second World War. Hence the classical framework of political risk analysis needs substantial reconsideration. The complexity of the present geopolitical context together with the interconnectivity characterizing our modern world impact the very logic and motivation lying beneath political actions which in turn may result in a negative side-effect to international trade and investment. The present research brings focus on two grounds for political risks transformation. The first is lying in the field of the new basis of the government action. The network concepts replacing traditional hierarchy of political actors, the wider access to political action and weakening of the nation state foundations result in the change of the very nature of political risks, their institutional origins and their geographical coverage. The other explanation for the new forms of political threat emergence is the switch in the political agenda. While in the 1960s–1970s political risks came as a consequence of various nationalist ideologies in the developing world, its recent manifestations are strongly connected with the new objectives of the modern state and society. Climate change, technological threats, word economic slowdown and other top global risks lead to drastic government and extra-government actions which incorporate a great potential for the development of political risks. The research unveils the algorithms of politically motivated business losses in the context of the global challenges our states are facing today. It resumes in a list of the main characteristics upon which they can be defined as „new political risks”, distinguished from the traditional forms and, thus, in need of the updated analytical approach.