Abstract:
The objective with this study is to determine if political risk analysis is of value for
the political decision-maker and also how political risk can be identified and
factored into political decision-making. Electricity supply in South Africa was used
to test the assumptions and findings related to political risk and decision-making.
Political risk analysis was also not used in the traditional way to determine
economic, investment or business risk, but rather to determine if the methods
underlying political risk analysis are of any value to political decision-makers in
deciding policy and policy-actions.
The value of this study lies in determining a systematic and representative body
of information and practice on political risk analysis to serve as tool and guideline
for political decision-making. Political risk is used in the context of political
decision-making, based on informed decision-making with a sensitivity towards
forecasting, anticipation and prioritising of decisions.
Different approaches to political risk, focussing on effective systems functioning,
early warning and traditional political risk analysis were selected. From this a
framework for the analysis of policy decisions and actions related to electricity
supply in South Africa was developed. The analysis determined that the negative
consequences of flawed decisions can be prevented, or can at least be limited if
informed decisions are taken, based on an understanding of possible future
outcomes and the implications thereof.
The study concludes that the analytical framework based on political risk analysis
is a valuable tool to assist political decision-makers. The flexible analytical
framework developed in this study provides evidence of the value and use of
political risk analysis as a tool to assist political decision-makers, that will also
have value in policy relevant areas such as the provision of water, youth
unemployment, development and education in South Africa.
