Political Risk in Lithuania and Central Europe - Moderate Risk Analysis Model
Volume 5, Issue 1 (2007), pp. 233–257
Pub. online: 20 November 2007
Type: Article
Open Access
Published
20 November 2007
20 November 2007
Abstract
The political risk analysis investigates the influence that political decisions, or their absence, have on business. The author of the article describes the aims and methodology of the political risk analysis and claims that the methods employed by the leading companies engaged in political risk analysis are no longer sufficient for investigating political risk in the stable democracies. Risks like wars, massive commotion, or economic crises rarely occur in stable countries. However, new types of threats like the breach of technical standards, health risks, natural disasters, and anti-corporatism prevail. The author names them "the moderate political risks" and introduces the two-step moderate political risk analysis model. The model is verified by applying it to analyse the political risk in Lithuania and later comparing the risk in Lithuania with the risk in three other countries of the Central Eastern European region: Estonia, Poland, and Hungary. The analysis shows that the moderate political risk differs in the four countries, although the traditional political risk is very similar.