Not Everything that Counts Can be Counted: A Critical Look at Risk Ratings and Governance Indicators
AbstractAccurately evaluating country risk and assessing the quality of governance in emerging market economies has become a priority of international corporations, investment banks and multilateral financial institutions. The rating system of the Political Risk Services (PRS) Group, the International Country Risk Guide (ICRG), constitutes one of the most influential time-series databases of country risk analysis. This study assesses the accuracy and predictive powers of the ICRG model, evaluating its ability to discern trends and highlight structural vulnerabilities, and thus to warn of impending crises. Three major crises are examined: the Brazilian financial crisis of 1999, the Argentine economic meltdown in December 2001 and the Peruvian political crisis of 2000. The study finds mixed results, which have important implications for research and policy.
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Bibliographic InfoArticle provided by Nordic Journal of Political Economy in its journal Nordic Journal of Political Economy.
Volume (Year): 29 (2003)
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Find related papers by JEL classification:
- A10 - General Economics and Teaching - - General Economics - - - General
- F35 - International Economics - - International Finance - - - Foreign Aid
- F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
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- Krisztina Kis-Katos & Helge Liebert & Guenther G. Schulze, 2012.
"On the Heterogeneity of Terror,"
Discussion Paper Series
19, Department of International Economic Policy, University of Freiburg, revised May 2012.
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