• About us
  • GSDRC Publications
  • Research Helpdesk
  • E-Learning
  • E-Bulletin

GSDRC

Governance, social development, conflict and humanitarian knowledge services

  • Governance
    • Democracy & elections
    • Public sector management
    • Security & justice
    • Service delivery
    • State-society relations
    • Supporting economic development
  • Social Development
    • Gender
    • Inequalities & exclusion
    • Poverty & wellbeing
    • Social protection
  • Humanitarian Issues
    • Humanitarian financing
    • Humanitarian response
    • Recovery & reconstruction
    • Refugees/IDPs
    • Risk & resilience
  • Conflict
    • Conflict analysis
    • Conflict prevention
    • Conflict response
    • Conflict sensitivity
    • Impacts of conflict
    • Peacebuilding
  • Development Pressures
    • Climate change
    • Food security
    • Fragility
    • Migration & diaspora
    • Population growth
    • Urbanisation
  • Approaches
    • Complexity & systems thinking
    • Institutions & social norms
    • PEA / Thinking & working politically
    • Results-based approaches
    • Rights-based approaches
    • Theories of change
  • Aid Instruments
    • Budget support & SWAps
    • Capacity building
    • Civil society partnerships
    • Multilateral aid
    • Private sector partnerships
    • Technical assistance
  • M&E
    • M&E approaches
    • Indicators
    • Learning
Home»GSDRC Publications»Country Risk Indices

Country Risk Indices

Helpdesk Report
  • Sumedh Rao
August 2012

Question

Summarise the available country risk indices. Identify whether they assess political, social, economic and/or other risks. Where possible identify the strengths and weaknesses of these tools for investors and policy makers.

Summary

Key finding: There are many country risk indices available, primarily produced by private companies. Different risk indices use different combinations of political, social, economic, environmental and other factors, but there is no universally accepted methodology for assessing risk. Comparison between methodologies is made difficult by the relative opacity of the methodologies. Most risk indices are commercial products. Consequently, the majority of companies that produce risk assessments do not make their methodology and sources easily accessible. There are also risk assessment methodologies that are tailored to specific businesses or in relation to the types of activities undertaken.

Amongst the country risk indices from private companies, some of the most notable risks assessors are the ratings from the ‘big three’ credit risk rating agencies: Standard and Poor’s, Fitch, and Moody’s. These credit risk agencies provide credit ratings for debt instruments, but also provide credit ratings for the debt issuers, which include sovereign countries based on a broad range of risk factors.

The most widely used country risk indices are the Euromoney index and the International Country Risk Group (ICRG) index. However, these do not accurately identify the political, economic and/or financial factors that contributed to the recent global economic crisis. Amongst these indices, it is, thus, hard to draw comparisons and identify the most useful indices. International organisations and government agencies do not produce country risk ratings themselves, but do make use of existing ratings from commercial providers. Government agencies undertake risk assessments, but these are primarily for internal or ‘enterprise-wide’ risk rather than risk for investing.

Development finance institutions need to take country risk into account. For example, the CDC Group, a UK development finance institution, largely leaves risk analysis to in-country fund managers who work within parameters outlined in the CDC Group investment code and legal agreements.

file type icon See Full Report [PDF]

Enquirer:

  • DFID

Related Content

Coping mechanisms in South Sudan in relation to different types of shock
Helpdesk Report
2020
Social protection
Topic Guide
2019
Cost-Effectiveness in Humanitarian Aid and Development: Resilience Programming
Helpdesk Report
2018
Refugees in Uganda: (in)stability, conflict, and resilience
Conflict Analysis
2018
birminghamids hcri

gro.crdsg@seiriuqne Feedback Disclaimer

Outputs supported by FCDO are © Crown Copyright 2021; outputs supported by the Australian Government are © Australian Government 2021; and outputs supported by the European Commission are © European Union 2021
Connect with us: facebooktwitter

Outputs supported by DFID are © DFID Crown Copyright 2021; outputs supported by the Australian Government are © Australian Government 2021; and outputs supported by the European Commission are © European Union 2021

We use cookies to remember settings and choices, and to count visitor numbers and usage trends. These cookies do not identify you personally. By using this site you indicate agreement with the use of cookies. For details, click "read more" and see "use of cookies".OkRead more