THE INDEX

We constructed a comprehensive geopolitical risk index, starting from six sub-indexes that we have analysed and constructed in detail. Find out more about the work of our Data Groups on this page.

The 6 sub-indexes capture:

Political Risk, Governmental Interventions, Globalization, Conflict and Unrest, Geographical Vulnerability, and Geoeconomic Dependency.

We refined our index by aggregating and weighting values in a logical manner, assigning each country a score from 0 to 10. A score of 0 indicates no geopolitical risk, while a score of 10 signifies the highest possible level of risk.

Furthermore, our final index includes only those countries for which all 6 Sub-Indexes were complete. This resulted in a total of 147 countries across 4 different continents being analyzed.

Political risk

The stability of the nation state according to political, social and economic criteria. Politic criteria include State Legitimacy, Government Effectiveness, Rule of Law, and Consecutive Years of Current Regime Type. Social aspect involves Group Grievance and Demographic Pressure. Finally, the economic dimension relates to Fiscal Health, Labor Freedom, Economic Decline, and Uneven Economic Development.

Government interference

We captured six different dimensions of government interference: 1) Perceived Corruption 2) Government Spending 3) Property rights 4) Regulation 5) Taxation 6) Trade Freedom. Starting from the assumption that a perfectly free market is the most efficient way to allocate resources, excessive or inappropriate government intervention tends to distort efficiency by a significant extent. Governments might have political instead of public interests when making regulatory decisions. Our final index spans from 2000 to 2022 and includes 165 countries.

Globalization

Interconnection among countries. It involves (1) Trade and Investments, (2) Tech, Knowledge, and people, (3) Multinational Enterprises, (4) Politics.

Conflicts and unrest

Risk or occurrence of events that can cause loss or risk to life, destruction of property or assets, forced migration, and internal and external threats to security. 7 dimensions are taken into account: (1) Security Apparatus, (2) Fractionalized Elites (Leadership Cohesion), (3) Refugees and Internal Displacement, (4) Ongoing Conflict, (5) Terrorism, (6) Militarization, and (7) Safety and Security for 160 countries worldwide with data from 2008 – 2023.

Geographical vulnerability

Level of geographical vulnerability of countries, both from a static and a dynamic point of view. The metrics included (1) Sea Access, (2) Sustainment of human activity, (3) Natural Disasters, (4) Climate Change, (5) Pollution, and (6) Natural Resources. Change of the dataset for the pollution section of the sub-index to now use the CO2 emissions of all world countries 2022 report from European Commission Emissions Database for Global Atmospheric Research.

Geoeconomic depedency

The extent to which reciprocal connection among states can be leveraged by states for foreign political agendas. This sub-index considers the most strategic economic sectors. (1) Energy Dependency, (2) Raw Materials Dependency, (3) Food Dependency, (4) Technological Dependency, (5) Financial Dependency and (6) Foreign Aid Dependency.

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