POL30820

This module provides both an introduction to and an in-depth review of the field of political risk, with a particular focus on the socio-political events, dynamics, and processes that can shape—and at times hinder—the success of multinational corporations (MNCs). At the heart of the course is the complex and often contentious relationship between foreign investors and host country governments. Drawing on insights from multiple disciplines including international political economy, comparative politics, international relations, global politics, international business, corporate and social responsibility, and international economics—the course offers an interdisciplinary perspective on political risk.

Key themes explored include:
• Understanding the concept of political risk.
• Causal chain analysis of political risk.
• Expropriation, and nationalization as critical challenges for MNCs.
• Economic nationalism and protectionism and their implications for foreign investment.
• The obsolete bargaining model and evolving investor–state dynamics.
• The relationship between regime types and FDI.
• Institutions, governance, and regulatory frameworks and how they influence investor confidence.
• Political risks in natural resource sectors, particularly in extractive industries.
• Issues of extraterritoriality and geopolitics.
• Impact of human rights on foreign direct investments.
• Emerging practices in political risk assessment and analysis.

In addition to examining these core issues, the module also highlights the practical instruments, strategies, and risk management techniques that MNCs employ to mitigate exposure to political risks. By integrating theory with real-world applications, this module aims to provide students with a nuanced and comprehensive understanding of how political risks emerge, evolve, and affect the objectives of global firms.