Lesson 5 of 9 · All lessons in this module
- Geopolitics, actors and political cooperation
- Resources, standards, soft power, institutions and the hierarchy of interests
- Globalization: features, motivations, costs and rollback
- The IMF, the World Bank and the WTO
- Geopolitical risk and the four archetypes of country behaviourVideo lesson
- The tools of geopolitics
- Types of geopolitical risk and how to assess them
- Scenario analysis, signposts and acting on geopolitical risk
- Integrated cases: reading a geopolitical brief
Lesson 5 of 9 · 13 min
Geopolitical risk and the four archetypes of country behaviour
Plot countries on two axes, cooperation versus non-cooperation and globalization versus nationalism, to get four archetypes (autarky, hegemony, multilateralism, bilateralism); where a country sits, and whether it is moving, tells investors how geopolitical risk is likely to arise.
In short
- Geopolitical risk = risk from tensions or actions between actors (state and non-state) that disrupt the normal, peaceful course of international relations; it rises when the geographic and political factors behind relations shift.
- Autarky (non-cooperative, nationalist): self-sufficiency, little external trade or finance, state firms control strategic industries.
- Hegemony (non-cooperative, globalized): a regional or global leader uses its influence to control resources; state firms control key exports.
- Multilateralism (cooperative, globalized): many trade partners, extensive rules harmonisation, firms fully integrated in global supply chains.
- Bilateralism (cooperative, nationalist): one-at-a-time agreements between two countries; regionalism lies between bilateral and multilateral.
- Interdependence makes cooperative countries less likely to be attacked but more exposed to risk elsewhere. Track a country's stability within its quadrant, not just the quadrant.
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