Ecole Supérieure de Commerce de Paris

Abstract

Political risk has become a major risk of business firms involved in international operations. Hence risk evaluation is a more and more crucial issue to be dealt with by different organisations: private firms, banks and even government agencies.

Political risk is composed of diverse, non-independent sources of risk, so that, after an identification of the components, one has to solve a multicriterion problem in order to yield a global evaluation.

First, a survey of major evaluation methods is presented.

Second, a systematic comparison of those methods is carried out.

Third, so as to come to a conclusion, a tentative list of major underlying theoretical difficulties together with main practical implementation problems are evoke.