Bridging the widening riot and civil disorder protection gap in the global insurance industry

Abstract

This article explores adjustments to the traditional political risk management practices followed by Multinational Corporations (MNCs) in their international operations to incorporate an increasingly concerning risk arising from the more frequent imposition of economic sanctions on developing countries over the last ten years for political purposes. In order to identify the main determinants of this risk and its consequences, a literature review is conducted, highlighting the models proposed by Tsebelis (1990) and Kakutami (2017) as the main frameworks to understand the dynamics for sanctions impositions, their frequency and the management of this risk by traditional MNCs from developed countries. Kakutami’s model is further enhanced in this article with a game theoretical model to understand the dynamic behavior of MNCs under this context, considering evidences of a growing presence in international markets of MNCs from developing countries, whose motivations for their expansion ar...