Analyzing Political Risk in Developing Countries: A Practical Framework for Project Managers

The paper illustrates a practical framework for understanding and predicting political economy risk for project managers operating in a variety of developing country settings, including non-democracies, ethnically diverse environments and societies undergoing political transition. In doing so, the paper also develops a number of novel cases illustrating the effectiveness of this framework in helping us understand both surprising success and failure in the realms of sustainable, private sector and human development. These cases include Tata Nano’s difficulties in locating its automobile plant in West Bengal, how a small NGO, the Mehta Foundation, helped secure passage of green fuel mandates in Delhi over strong political opposition, and the sustained success of Mexico’s pioneering conditional cash transfer program-Progressa/Oportunidades — in an environment of dramatic political regime change.