How can we use current quantitative information to predict future political events, such as expropriation?

What will be an ideal response?

Most risk-rating services look for measurable attributes and indicators that, in the past, have been correlated with future risk events. For example, left-wing governments may be associated with actions that harm foreign investors, such as stricter labor regulations or outright nationalization. Countries with unstable governments and frequent, forced elections have a higher probability of electing left-wing officials within a particular period than countries with stable governments. This is true even if a right-wing government may be in power currently. Consequently, the frequency of government changes is used as a risk attribute. Generally, political risk services examine indicators of political risk, such as the following:
? Political stability (for example, the number of different governments in power over time)
? Ethnic and religious unrest; the strength and organization of radical groups
? The level of violence and armed insurrections; the number of demonstrations
? Property rights enforcement
? The extent of xenophobia (fear of foreigners); the presence of extreme nationalism

The different political variables are then weighted and added to provide one country score. Such overall scores may be the best indicators of an extreme political risk event, such as expropriation. Some services, such as the PRS Group, do provide subcomponents that may be more correlated with the specific political risk event, such as "democratic accountability" and "government stability." In particular, one subcomponent, Investment Profile, specifically considers risk factors that directly affect the risk of expropriation.