|**Table A23: Political Risk Services(140 developed and d**|**evelop**|**ing c**|**ountri**|**es)**||||
|---|---|---|---|---|---|---|---|
|**Voice and Accountability**<br>_Military in Politics_The military are not elected by anyone, so their participation in<br>government, either direct or indirect, reduces accountability and therefore represents a<br>risk. The threat of military intervention might lead as well to an anticipated potentially<br>inefficient change in policy or even in government. It also works as an indication that<br>the government is unable to function effectively and that the country has an uneasy<br>environment for foreign business.|2005<br>X|2004<br>X|2003<br>X|2002<br>X|2000<br>X|1998<br>X|1996<br>X|
|_Democratic Accountability._Quantifies how responsive government is to its people, on<br>the basis that the less response there is the more likely is that the government will fall,<br>peacefully or violently. It includes not only if free and fair elections are in place, but<br>also how likely is the government to remain in power or remain popular.|X|X|X|X|X|X|X|
|**Political Stability**||||||||
|_Government Stability._Measures the government’s ability to carry out its declared<br>programs, and its ability to stay in office. This will depend on issues as: the type of<br>governance, the cohesion of the government and governing party or parties, the<br>closeness of the next election, the government command of the legislature, and<br>approval of government policies.|X|X|X|X|X|X|X|
|_Internal Conflict._Assess political violence and its influence on governance. Highest<br>scores go to countries with no armed opposition, and where the government does not<br>indulge in arbitrary violence, direct or indirect. Lowest ratings go to civil war torn<br>countries. Intermediate ratings are awarded on the basis of the threats to the<br>government and busines.|X|X|X|X|X|X|X|
|_External conflict:_The external conflict measure is an assessment both of the risk to the<br>incumbent government and to inward investment. It ranges from trade restrictions and<br>embargoes, whether imposed by a single country, a group of countries, or the<br>international community as a whole, through geopolitical disputes, armed threats,<br>exchanges of fire on borders, border incursions, foreign-supported insurgency, and full-<br>scale warfare.|X|X|X|X|X|X|X|
|_Ethnic tensions_: This component measures the degree of tension within a country<br>attributable to racial, nationality, or language divisions. Lower ratings are given to<br>countries where racial and nationality tensions are high because opposing groups are<br>intolerant and unwilling to compromise. Higher ratings are given to countries where<br>tensions are minimal, even though such differences may still exist.|X|X|X|X|X|X|X|
|**Government Effectiveness**||||||||
|_Bureaucratic Quality._Measures institutional strength and quality of the civil service,<br>assess how much strength and expertise bureaucrats have and how able they are to<br>manage political alternations without drastic interruptions in government services, or<br>policy changes. Good performers have somewhat autonomous bureaucracies, free<br>from political pressures, and an established mechanism for recruitment and training.|X|X|X|X|X|X|X|
|**Regulatory Quality**||||||||
|_Investment Profile._Includes the risk to operations (scored from 0 to 4, increasing in<br>risk); taxation (scored from 0 to 3), repatriation (scored from 0 to 3); repatriation (scored<br>from 0 to 3) and labor costs (scored from 0 to 2). They all look at the government’s<br>attitude towards investment.|X|X|X|X|X|X|X|
|**Rule of Law**||||||||
|_Law and Order._The Law sub-component is an assessment of the strength and<br>impartiality of the legal system, while the Order sub-component is an assessment of<br>popular observance of the law.|X|X|X|X|X|X|X|
|**Control of Corruption**||||||||
|_Corruption._Measures corruption within the political system, which distorts the<br>economic and financial environment, reduces the efficiency of government and<br>business by enabling people to assume positions of power through patronage rather<br>than ability, and introduces an inherently instability in the political system.|X|X|X|X|X|X|X|

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