Analysts monitor the status of nation-states to assess their risk of debt default, political disruption, impacts of climate change, and more. Many risk reports base their analysis on the "PESTLE" model, which stands for:
- Political: corruption, political stability, import/export restrictions, etc.
- Economic: labour issues, production or supply chain problems, etc.
- Socio-cultural: cultural values, shifts in population demographics, consumer behaviour, etc.
- Technological: risks arising from communications, transport, and other technologies or infrastructures
- Environmental: effects of climate change (including programs imposed to combat it), risk of natural disasters, etc.
- Legal: the legal environment and changes in the law
Almost all country risk reports boil down to numeric values or letter grades, so be sure to check the each report's details and published methodology to understand how the scores were devised.
