Country Risk and Governance: Strange Bedfellows?

  • Michel Henry Bouchet
  • Bertrand Groslambert
Part of the Centre for the Study of Emerging Markets Series book series (CSEM)


Enron, Worldcom, Vivendi and Parmalat, among many other examples, cast light on a lack of transparency and accountability, namely, bad corporate governance. Likewise, Cameroon, Turkmenistan, Argentina, Nigeria or Burma all constitute examples of dreadful sovereign governance. The combination of public awareness and better information has placed the issue of governance and government efficiency at centre-stage in political risk assessment. Country risk cannot be captured any longer by scrutinizing liquidity and solvency indicators or by overrefining sensitivity analysis in balance of payments projections. Although governance emerged as a research issue in the academic community in the mid-1960s, it moved onto the front burner of the policy-making debates only 30 years later. Corruption was brought into the picture when scholars started to question the quality of the economic decision-making process and the allocation of the growth benefits. Issues of capital flight and economic inefficiencies were raised to assess the scope of ‘Dutch disease’ in countries where too much and too fast wealth is managed unwisely.1


Capital Flow Political Risk Corruption Perception Index Country Risk Capital Flight 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© Michel Henry Bouchet and Bertrand Groslambert 2005

Authors and Affiliations

  • Michel Henry Bouchet
  • Bertrand Groslambert

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