Risk Analysis Within Political Science - Research Paper Example

Risk Analysis within Political Science Risk analysis in political science is a branch of political science asa career subject that deals with the scrutinizing, evaluating and giving honest position of a country with regard to its ability to support and enhance certain activities within it such as investments and business operations. In the risk analysis, the political scientists endeavors to study the political climate of the region of the country by considering the tranquility and the stability of the country in light of the levels of crime rate in the country, convertibility of the currency coupled with issues related to land as well as other factors that are directly compromises the essence of investment and property development in a country (Waterstone,pg. 98). The information regarding the political risks is collect ted by the analyst who the give their findings to the relevant authorities to make informed decision as to whether the risks involved can be overcome or if the risk are too much to bear thus should necessitate quitting the plan of making the investments. Risks in the political science can also emanate from within a country; this is in the case of the political decisions that are made within the country. Any slight political hiccups in a country do jeopardize the investor’s ability to engage in doing business within some geographical regions. Political risks thus do impacts heavily in the way a country deals with the capacity to create employment opportunities to its citizen as well as the ability to ensure sustainable business relation with the neighboring countries and the need to ensure that the balance of trade and the balance of payments are favorable (Kobrin,pg. 111). This is to avoid the currency being inferior to other countries. Foreign Direct Investment (FDI) is quite common in the worlds emerging markets, the emerging markets are envisioned to have a robust market for the numerous production that is exuded by the foreign investors. This productions has to be consumed in the regions with overwhelming markets and this is why the investors do research t identify these markets and make decision to trap the market available (Waterstone,pg. 123). In some unfortunate circumstances, the political situation in these regions becomes volatile making the investors to renege on their decision to engage the region in productive business; this is so because they fear loosing their investment due to outbreaks of war and other upheaval activities that do not support smooth operation of business. The analysis of the political risks enables the investors to project on the possibilities of the threat occurring and the likely damage that is associated with them, in this sense the mitigative measures can be coined to help cushion the associated businesses from the devastating and sporadic confusions that come with the political decisions. These risks can also be brought about by the social problems such as over population, unemployment especially for the youths which always results into juvenile delinquency and increased crimes rate. These factors are recipe for making environment unfit for business and they require political solutions to quell. In political science, the analyst always endeavors to give hypothesis of the situation as they possibly would be and on the other side do give the repercussions tied to them occurring as stated. They also propose on how to mitigate on the effects of the occurrences. The risks in this case would involve several factors including; the change of the government, when the government of a country changes, there are chances that most policies governing the country will also change depending on the policies contained in their manifesto. The policies that might change include the taxation policies with regard to domestic and foreign products. The changes in the taxation policy can turn to be punitive and extorting and this can lead to realization of losses by the companies, organization and other business partners that operate business within the country. Several risks face the business partners and investors, in some instances the government can be toppled through a coup de tat. In the event of such occurrences, the investors are most likely to suffer the risk of loosing their business in the hand of the insurgent solders. In countries that are known to be prone to insurgency investors have shown hesitant approach to conduct and do business in such areas on fears that the areas caches of turning volatile are high and this will automatically lead to them losing their assets (Guehlstorf,pg.47). The instability of a functioning government is a way of a risk that most investors are not able to give a trial and more frequently, they do keep at a bay in doing business in the areas. Political risk is also associated with sanctioning a county not to participate in the bilateral trades. Most countries belong to trading blocs, these trading blocks coalesce countries that are from a defined geographical region and have made a formal decision to conduct trade without imposing the trade barriers to its members and they are legitimately allowed to conduct free trade within the countries (Waterstone,pg.134). In the event that the government is seized by illegitimate factions, the benefits of the regional trade organizations may be lifted with regard to the specific countries and the investors in the country will not be able to conduct further trade with the neighbors upon enforcement of restrictive laws that will limit the extent of trade between the country and its neighbors. In this case, the investors are at risk of severely being impacted upon by the sanctioning. The government may also decide to restrict the extent of the profits that are repatriated by the investors in the country to their mother countries. The government may decide to make such decisions to allow for the rapid development in the country. In this case, the investors will be disadvantaged since their aim is to repatriate the profits back into their countries, when this aim is not given a consideration by the government policy, there is the tendency that the investors will have to seek an alternative to relocate to other countries with friendly policies that do not restricts on retention of the profit in the country where the business is done. The bureaucratic policies in a country are thus a political risk that needs to be addressed appropriately to be favorable for the investor to conduct business (Guehlstorf,pg. 56). Political risk can therefore be defined as any process that limits the investors from making profit due to the drastic a change of the regulatory policies that guides the country. These changes in most cases are not expected and that qualifies as to why they are referred to as risks. They at times constitute even the proclamation of the president or some other authorities in a country (Jarvis.pg.76). There has been an increase in awareness of problems that emerge as a result of public policies, political processes and systems and political behaviour among the public. Due to the above, people are more concerned about the risks that such political system and processes are likely to bring and they are currently demanding for better engagement in decision making processes that are likely to influence or change the prevailing political landscape in terms of public policies and political systems. Risk analysis and perceptions is increasingly becoming an important issue to politicians and policy makers as there is an increased need to make decisions based on sound and extensive analysis of issues. This paper examines risk analysis within the confines political science as a discipline. Risk refers to the likelihood that an individual will experience the effect of danger. Other authors have also defined risk as the situation or an event where something of human value, including human themselves is at stake and where the outcome is uncertain (Kobrin,69). There is need for conclusions and decisions that are made based on appropriate analyses and empirical data that are derived from risk analysis and assessment in political science. Risk can be better understood in reference to risk perception which refers to the probability of a specified type of an accident happening and how concerned people are with the consequences (Slovic,pg.689). Risk perceptions involve the evaluation of the probability of occurrence of such risks and their consequences. Risk perception and analysis is therefore an important aspect in policy development and political system. This can be attributed to the fact that decisions making is always a political matter where all sections of the society are considered and for such decisions to be adopted, they should be acceptable by the public and institutions. In recent years, public perception has been central in the determination of priorities and legislative agendas of many governments and regulatory agencies. Political risk analysis involves the analysis of history or current events that might lead to a projection of circumstances under which harm occurs (Jarvis,pg.2). The role of risk analysis is that it offers a comprehensive and robust framework upon which scientific knowledge and data can be applied and examined while at the same time, it offers systematic methods and frameworks where decisions can be revised in the light of new events or information (Jarvis,pg.8). Political risk assessment entails the analysis of the prevailing political climate of a country, prospects of political instability, economic and financial prospects, effect of rules, policies and legislations, government attitude and role in divestment particularly foreign investment among others. Risk analysis within the confines of political science is beneficial to other disciplines such as law, ethics, philosophy, public policy, communications, finance and economics because of the multidisciplinary approach that risk analysis embraces (Guehlstorf,pg.87). The prevailing political system of a country can influence and impact positively or negatively on various aspects of governance and leadership and thereby determining stability of such nations. For instance, political leadership and governance of a country has the potential of influencing business and investment in a country. This is in respect with policies, rules and regulations that are geared towards business establishments and operations. Political risk analysis therefore entails various tools and methods that comprise both quantitative and qualitative approaches (Kobrin,pg.70). In the execution of political risks in countries various disciplines are integrated so as to build a more comprehensive and useful analysis. Examples of major disciplines that are often integrated in political risk analysis include economics, sociology, finance, political science, international relations and social sciences. Risk analysis is important in the setting up and development of major instruments of regulations and standards that are used in world agencies such as those related to environment or health. This is because decision-making is always based on risk analysis report and frameworks. The framework of risk analysis within the political system consist of five elements namely problem formulation, risk assessment, risk perception, risk communication and risk management (Waterstone,pg.120). The initial step in undertaking risk analysis within the context of political science is problem formulation and identification. Most public policies or re-alignment of political system and processes are informed by certain problems or challenges that are of concern. Problem formulation stage allows those involved to reach a consensus on issues based on goals, objectives and values. At this stage, various stakeholders might have overlapping and divergent goals and objectives concerning the problem and hence it is at this stage that such divergent views are harmonized. Without clear understanding of the aspirations’ and objectives of various stakeholders, new political systems and processes and public policies may be developed but they may not be implemented (Guehlstorf,pg.143). This process therefore calls for the input of various political analysts and policy analysts that are within the public or private practice. More often, problem formulation stage extends from political science to include decision from other experts such as economists, decision analysts, statisticians, sociologists and other related professionals (Jarvis.pg.6). Risk assessment is the second step and it normally involves the identification of risks ad uncertainties of the anticipated public policies, political system and processes, re-structuring of governance and political behaviours. The import of risk assessment is to gather information that might be used in the process of making decisions that are related to decision making (Stern and National Research Council,pg.80). Risk assessment entails the identification and quantification of cause-and-effect relationship that such political systems and processes or public policies may pose by identifying their consequences. The process of risk assessment therefore encompasses the description of the vulnerabilities and consequences of political behaviours, systems and processes and the resultant public policies that emerge as a consequence of such political decisions. The third phase of risk analysis within the precincts of political science is risk perception. Risk perception is related to the psychological and emotional factors that greatly influence the behaviour of people. People are likely to perceive risks based on their personal knowledge, experiences, belief and their influence and recognition of threats and vulnerabilities (Redmill,pg.4). The disparities in public perception of risks are also exacerbated by the line of thought between lay people and experts. The existence of parallel line of though between lay people and experts has led to disagreements on various public policies, a matter that was generally attributed to the exclusion of the general public in decision making process (Slovic,pg.670). Risk perception phase therefore include the perception of the general public on various issues that are likely to be addressed by political scientists. It is important to note that risk perception stage has numerous challenges that are associated with the difficulty in which people of divergent views make decisions or settle on compromised decisions. Risk communication entails the process of influencing or changing the mind of individuals or groups concerning the perceptions on the risk that is associated with a public policy or political system (Waterstone,pg.126). During the process of risk communication, risk analysts, policy makers, decision makers provide data, information and knowledge to the public so as to find out their inputs through participation and interactions. The goals of risk communication in risk analysis within political science include provision of information to individuals, groups and organizations concerning the anticipated and perceived risks so that they can be better informed or to give them room to seek more information, to influence the general public to change their behaviours, attitudes and beliefs concerning risks that are associated with political system and processes and for them to accept the laid down risk management decisions and policy recommendations, to involve affected parties in decision making and to facilitate participation of the affected parties or the entire public in resolving disputes and building consensus on the key issues (Waterstone,pg.126). This process requires the engagement of the public as it ensures that the decisions made reflect the ongoing circumstances and priorities ,provides more assurance to the public that their legitimate concerns have been addressed and it increases public trust in relation to decision making. The last phase is risk management which entails the process of constructing, evaluating, implementing, monitoring, and revising strategies with a view to reduce or eliminate risks that are associated with the political processes or systems and public policies (Stern and National Research Council,pg, ). The process of risk management takes into account the information from political scientists and other policy analysts together with other risk assessment factors and inputs from the public based on their risk perception and in turn develops alternative approaches or new strategies to deal with any risk or challenge. In relation to political science, risk management involves a combination of various strategies and options such as offering of economic incentives, provision of more information and re-structuring of the political processes and systems (Jarvis,pg.4). Conclusion The public is increasingly aware of various challenges and problems that arise from certain decisions that are linked to political processes and problems. This has prompted political analysts and policy makers to undertake risk analysis before embarking on any key decision making or formulation of public policies. The risk analysis stages involved include problem formulation, rock assessment, risk perception, risk communication and risk management. This process is capable of providing key information and data to political scientists and analysts and public policy makers in order for them to make informed decisions and policies. The above process of risk analysis in the context of political science can help political scientists and policy planners to estimate risks that are associated with decision making and to determine the exposure and extend of such risks. Works Cited Guehlstorf, Nicholas P. “The Political Theories of Risk Analysis.” New York : Springer, 2005. Jarvis, Darryl S.L.“Conceptualizing, Analyzing and Measuring Political Risk:The Evolution of Theory and Method.” City of Singapore: National University of Singapore, 2000. Kobrin, Stephen J. "Political Risk: A Review and Reconsideration." Journal of International Business Studies 10.1 (1999): 67-80. Redmill, Felix. "Risk Analysis - a Subjective Process." Engineering Management Journal 12.2 (2002): 1-8. Slovic, Paul. "Trust, Emotion, Sex, Politics, and Science: Surveying the Risk-Assessment Battlefield." Risk Analysis 19.4 (1999): 689-701. Stern, , Paul C and National Research Council. “Understanding Risk:Informing Decisions in a Democratic Society.” Washington, D.C: National Academies Press, 1996. Waterstone, Marvin. “Risk and Society:The Interaction of Science, Technology, and Public Policy.” New York : Springer , 1996. Read More