Purpose
Produce a standardized, comparable political risk profile for a country or region — scoring six governance and stability dimensions on a common scale, rolling them into a weighted composite, and translating each score into concrete operational implications for the specific exposure being assessed.
When to Use
Invoke this skill when the user asks to:
- Assess political risk for entering or expanding into a new market
- Score a country before an investment, acquisition, or joint venture commitment
- Evaluate risk at a supply chain node or manufacturing location
- Build comparable risk profiles across a shortlist of candidate jurisdictions
- Re-score an existing operation after an election, coup, sanctions event, or regime change
- Justify a country risk premium or capital allocation decision to leadership
Inputs Required
Before starting, collect:
- Country or region: The specific jurisdiction being scored (national, sub-national, or a defined region)
- Operation type: Market entry / capital investment / supply chain / existing operation / financing exposure
- Exposure profile: Capital at risk, asset mobility (fixed plant vs. relocatable), and time horizon
- Sector: The industry involved — extractives, financial services, tech, manufacturing, consumer goods, etc.
- Nationality of the entity: Home-country of the investing/operating firm (affects sanctions and treaty exposure)
- Existing footprint: Whether the firm already operates there, and any prior incidents
- Dimension weighting preference: Default equal weighting, or a custom emphasis (e.g., heavier expropriation weight for extractives)
If exposure profile or weighting is missing, apply equal dimension weights and note the assumption. Sector materially changes which dimensions dominate, so ask if it is unclear.
Instructions
Step 1: Establish Scoring Convention
Score every dimension on a 0–100 risk scale where higher = more risk. Anchor each score to a band so it is defensible and comparable:
- 0–20 Minimal: Stable, predictable, institutionalized
- 21–40 Low: Generally sound with isolated weaknesses
- 41–60 Moderate: Meaningful vulnerabilities requiring active management
- 61–80 High: Structural instability or hostility to foreign operators
- 81–100 Severe: Active crisis, hostility, or breakdown
For each dimension, state the numeric score, the band, and 2–3 sentences of specific justification citing concrete conditions — not generic descriptors.
Step 2: Score the Six Dimensions
Dimension 1 — Governance Quality Assess rule of law, judicial independence, corruption levels, contract enforcement, and bureaucratic effectiveness.
- Higher risk: politicized courts, endemic corruption, weak or arbitrary contract enforcement, opaque decision-making
- Lower risk: independent judiciary, enforceable contracts, transparent and consistent administration
- Sector note: heavily weight contract enforcement for long-cycle capital projects
Dimension 2 — Social Stability Assess protest activity, labor unrest, ethnic/sectarian tension, inequality-driven instability, and government legitimacy.
- Higher risk: recurring mass protests, entrenched inequality, contested elections, active separatist or communal tension
- Lower risk: broad social cohesion, functioning grievance channels, stable labor relations
Dimension 3 — Regulatory Predictability Assess consistency of policy, frequency of adverse regulatory change, tax stability, capital controls, and treatment of foreign entities.
- Higher risk: frequent retroactive rule changes, sudden tax or tariff shifts, currency/capital controls, discriminatory licensing
- Lower risk: stable predictable framework, grandfathering of rules, transparent regulatory pipeline
- Sector note: elevate this dimension for regulated industries (finance, telecom, pharma, energy)
Dimension 4 — Sanctions Exposure Assess current and probable future sanctions, secondary-sanctions risk, and the specific entity's home-country regime exposure.
- Higher risk: active comprehensive or sectoral sanctions, high secondary-sanctions risk, geopolitical trajectory toward restriction
- Lower risk: no material sanctions exposure, aligned with the entity's home-country policy
- Always evaluate against the entity's nationality — sanctions risk is home-country-dependent
Dimension 5 — Conflict Risk Assess armed conflict, terrorism, cross-border tension, insurgency, and coup/political-violence probability.
- Higher risk: active or frozen conflict, terrorism, border militarization, recent or credible coup risk
- Lower risk: no armed conflict, low political violence, stable civil-military relations
Dimension 6 — Expropriation History Assess nationalization precedent, forced localization, asset seizure, license revocation, and creeping expropriation (regulatory taking).
- Higher risk: documented nationalizations, forced local-ownership mandates, arbitrary license revocations, weak investor protections
- Lower risk: strong bilateral investment treaties, ICSID membership, no expropriation precedent
- Sector note: extractives, utilities, and infrastructure carry structurally higher expropriation risk
Step 3: Calculate the Composite Score
- Apply the weighting (equal by default; custom if provided) and compute a weighted average across all six dimensions
- Present the composite as a 0–100 number and assign it a band
- Identify the top two risk drivers (highest-scoring dimensions weighted by their share of the composite) — these define the risk character of the exposure
- If any single dimension scores 81+ (Severe), flag it as a standalone red-line regardless of the composite, since composites can mask acute single-point risk
Step 4: Build the Trajectory Outlook
Assess direction over the next 6–18 months for each material dimension:
- Improving / Stable / Deteriorating, with the specific catalyst (election, IMF program, sanctions review, leadership transition, commodity cycle)
- Name the single most likely event that would materially change the composite score in either direction
Step 5: Translate to Operational Mitigation
For the top risk drivers, give concrete, exposure-specific mitigations:
- Contractual (governing law, arbitration seat, stabilization clauses)
- Structural (JV vs. wholly-owned, holding-company jurisdiction, treaty routing)
- Financial (political risk insurance, hedging, phased capital deployment)
- Operational (asset mobility, local partner selection, contingency triggers)
Output Format
- Structure: Executive summary → dimension-by-dimension scoring → composite calculation → trajectory outlook → mitigation guidance
- Length: 900–1,300 words
- Format: Prose justifications with a scored dimension table; composite and top drivers called out prominently
- Sections: Summary (composite score + band + top two drivers) → Six Dimension Scores (table + justification each) → Composite & Red-Line Flags → 6–18 Month Trajectory → Operational Mitigations
- Tone: Sober, defensible, analyst-grade — every score justified by specific conditions, no hedging, no alarmism
Quality Checklist
Before delivering output, verify:
- [ ] All six dimensions are scored with a number, a band, and specific justification (not generic language)
- [ ] The composite is a weighted calculation consistent with the stated weighting, and the math is shown
- [ ] Sanctions exposure is evaluated against the entity's home-country nationality — not scored in the abstract
- [ ] Top two risk drivers are explicitly named, and any dimension scoring 81+ is flagged as a standalone red-line
- [ ] The trajectory outlook names specific catalysts and the single most likely score-changing event
- [ ] Mitigations are tied to the actual top drivers and exposure type — not a generic checklist
Notes
- Composite scores are only comparable when weighting is held constant across jurisdictions — keep the weighting fixed when scoring a shortlist for direct comparison
- Expropriation risk is often understated in nominally stable markets undergoing resource-nationalism or forced-localization cycles; weigh precedent over current rhetoric
- Sector transforms the risk picture: the same country can be low-risk for consumer goods and high-risk for extractives — always score against the specific operation, not the country in general
- Re-run scoring after any election, sanctions designation, coup, or major regulatory reform; political risk scores decay quickly around discrete political events
How to use this skill
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Installing in Claude Code:
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Using in Claude.ai, ChatGPT, Gemini, or other AI tools:
- Drag this file into a new chat, or copy and paste its contents
- Send your task or request as your next message — the AI will apply the skill where it fits
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