Political Systems

Question 1

Political Dimensions

Answer 1

Political Ideology
Type of System (Democracy vs Totalitarianism
Political Freedom

Question 2

What is a political Hazard

Answer 2

A …. are the frequent and arbitrary changes in political system or policy environment

Question 3

What are the key questions?

Answer 3

How and to what extent is the government involved in the economic system?
How by which mechanism is the economy coordinated?
How much freedom do economic actors have?

Question 4

Types of political Risks

Answer 4

• systemic (changes macro environment)
• procedural (changes affecting cross-border transactions MNCs
• distributive (changes affecting local property rights of foreign companies)
• catastrophic (affects every firm)