Populism, political risk, and pandemics: The challenges of political leadership for business in a post-COVID world

Abstract

The examination of political risk, political uncertainty, and political institutions in the international business literature has, not unexpectedly, been shaped by the prevailing issues faced by firms at their time of writing. While these three separate angles together have provided an iteratively more comprehensive view of the politics and business nexus, they are still missing an important component, namely the ability of specific actors to utilize political uncertainty and generate institutional volatility. This paper examines the rise of two specific phenomena that challenge prevailing theoretical frameworks, and potentially have the ability to render our previous insights less relevant: first, the rise of populism as a persistent political force in developed economies, and second, the rapid spread and disparate political response to COVID-19. We argue that exclusively institutional-based frameworks are inadequate to cope with the political realities of the 21st century, as institutions themselves are being subverted or utilized for actions far beyond their original conception in practice and their operationalization in the IB literature (something that COVID-19 has exacerbated). Although extant IB work has much to recommend itself in helping to understand risk and uncertainty in the political sphere, these new challenges for business reveal that we need to incorporate political personalities, actors, and leaders(hip) into our research. Only then can we have a more complete picture of how politics can influence business.