Journal of Political Risk, Vol. 1, No. 7, November 2013.
By Tom Elliott, Ph.D.
On March 27, 2013, while the technology world preoccupied itself with a sophisticated cyberattack on a spam prevention service, a low-tech assault on the Internet was taking place in shallow waters off Alexandria, Egypt. Three men with scuba gear and a fishing boat were arrested while allegedly trying to cut one of the main communications cables that links Europe to the Middle East and Africa. This incident of hacking – in the most literal sense of the word – should remind us that the Internet we all rely upon depends upon physical infrastructure, much of which is easily located and relatively unprotected. Continue reading →
Journal of Political Risk, Vol. 1, No. 6, October 2013.
Map of Egypt. Source: University of Texas.
By Anders Corr, Ph.D.
Egypt is on the verge of being engulfed by a long-term insurgency. After a brief period of democratization following the Arab Spring, the world’s most populous Arab country has returned to a popular military dictatorship. General Sisi will likely lead the country, either as power behind the President, or as President himself. The primary difference between the Egypt of Sisi and the Egypt of the pre-Arab-Spring Mubarak will be a function of the overthrow of the democratic Islamism of President Morsi. A new outraged minority with pro-democracy and pro-Islamist beliefs fielded popular protests, and was repressed with lethal force. A significant minority of that minority will now divert their energy towards terrorism and organized insurgency. Continue reading →
Journal of Political Risk, Vol. 1, No. 4, August 2013.
Figure 1: Comparison of Gambia and Sierra Leone on the Ease of Doing Business in 2013. Data Source: World Bank. 
By Anders Corr, Ph.D., and Naheed Vadsaria
Political risk in the tiny West African state of “The Gambia” is high. Named after the small river around which its borders fluctuate, the country hosts a dictatorship established in a 1994 coup. The country also hosts Hizbollah operatives who conduct international financial transactions, and is one of the top African cocaine transshipment points to Europe. Local businesses are considering fleeing to Sierra Leone to escape a raft of seemingly arbitrary and protectionist laws promulgated by the President for potentially personal reasons. Continue reading →
Long considered an anchor of East African stability, Tanzania has recently made headlines for aggressive expansion of its mining and extractive industries. In what might be considered growing pains, economic prosperity has strained government and civilian relations, and is increasingly testing the governance skills of Tanzania’s Ministries. Adverse investment laws, widening religious conflict, and proliferation of small arms and light weapons, however, tarnish Tanzania’s image as a peaceful and prosperous republic. Continue reading →
Figure 1. Effect of GDP Per Capita on the Social Progress Index (Model 1)
Journal of Political Risk, Vol. 1, No. 1, April 2013.
By Anders Corr, Ph.D.
Social Progress Imperative, a global group that produces well-being data for 50 countries, released their Social Progress Index (SPI) today. The index compares countries not on GDP, but rather on a single quality of life metric as a function of housing, health, education, and environmental sustainability. The index is backed by Harvard Business School professors and the Skoll Foundation (WSJ).
Sweden, Britain, and Switzerland have the best Social Progress Index scores, because these countries have some of the highest GDPs per capita of the fifty countries in the index. It is no coincidence that the three lowest SPI scores – Ethiopia, Nigeria, and Uganda, have very low GDPs per capita. The best way to understand SPI is therefore to control for GDP per capita. Corr Analytics did simple regression analysis on SPI. Approximately 84% of the index is explained by gross domestic product (GDP) per capita (see technical details below). Countries with large economies relative to their populations will have more wealth that can be channeled to the basic necessities measured by SPI. Therefore the simpler standard used by economists for decades — GDP per capita — works quite acceptably for well-being. Continue reading →
French Foreign Minister Laurent Fabius recently indicated that development would be a priority in Mali as a counterinsurgency strategy. The theory is that after winning the war, an infusion of development funding will solidify gains among the population and strengthen their resolve against Islamist rebels. French and Malian officials are currently in Lyon, France, discussing details of 300 projects that will focus on water, health, education, and job training (BBC, EuroNews).
While providing development to impoverished Malians is intuitively good, the likely small scale of the overall project, combined with its implementation in a conflict zone, pose complications and could even lead to confounding effects. Mali has an overall population of 15.5 million sharing a GDP of $9.6 billion ($619 per capita) (CIA Factbook). While the amount of development funding planned by France has not been revealed, development funding in Afghanistan can be used as a point of comparison: $62 billion over ten years from 2002-2011 (National Defense University), or about $200 per person per year. An equivalent development level for Mali would require $3.1 billion for 2014 alone, which is unlikely given the state of France’s economy.
The impact of $200 of funding per person per year in Mali could actually be negative. Twenty-five percent is probably lost to legitimate administration. Through corruption, government officials could absorb 5-15% of the remaining funding. Through extortion, Islamist rebels could “tax” the development contractors doing the actual construction or service delivery in Northern Mali. This could provide them with access to scarce cash necessary to take their rebellion to a more lethal level. Finally, populations with heightened expectations from advance hearsay of the development projects could have those expectations dashed by the inadequacy of those projects once they reach the villages. While a nice gesture, whatever development funding remains after administration, corruption, and extortion costs (about $120 per capita by my calculation) may seem stingy to a Malian villager who is now intimate with the French rolling around in million-dollar armored vehicles, and streaking across the sky in jets.