Types Of Political Risk Index Essay - 1016 Words

As mentioned before, components of political risk index are divided into six sub-indicators. This section examines changes in political risks’ sub-indicators as a response to political changes and the mutual relationship between the six sub-indicators that form political risk index in Egypt. 3.1 Behavior of and Changes in Political Risks’ Sub-Indicators Figure (1) shows that indicators of political risk have had noticeable changes especially after 25th of January revolution except for government effectiveness and control of corruption indicators which stayed at levels 0.5 and 0.33 respectively during the considered period. The following points summarize the performance of political risks’ sub-indicators as a response to political changes in Egypt. An indicator with points near to 1 indicates a relatively very low risk indicator, while an indicator with points near to 0 indicates a relatively very high risk indicator. †¢ The most vulnerable and risky indicator of political risks’ sub-indicators is voice and accountability indicator, as points awarded to this indicator were always below 0.5 and hence it is always located in very high risk zone. Prior to 25th of January (from 2006 to 2010), the indicator recorded 0.4 average points and during revolutions period this average points has been dropped to 0.24. Voice and accountability indicator recorded average points 0.33 during the whole considered period (2006-2014) with standard deviation 0.09 points. †¢ In spite thatShow MoreRelatedPolitical Risk948 Words   |  4 PagesPolitical Risk Political risk is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with reasoned foresight and investment. 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