Major Political Variables, according to Antoine W. van Agtmael, “Evaluating the Risks of Lending to Developing Countries”, Euromoney, April 1976, pp. 16-30.
I. Internal aspects
- Time and mode of independence
- Record of stability
- Sense of national duty?
- History of conflict between ethnic or religious groups?
- Is there a dominant ethnic group or are groups of equal strength?
C. Forms of government
- Strong opposition parties with radically different ideology?
- Effective government or chaotic situation?
- Voting along ethnic lines?
- Is government senstitve to needs of the population?
If military government:
- Widespread popular support or national liberation front?
- How strong is the army?
- Rivalries among army commanders?
- Underground opposition strong?
- Did military government follow ineffective, unpopular democracy?
- Does the regime have to rely heavily on repression or can it afford a certain degree of freedom?
- Do civil servants play a major role or are they alienated?
- What alternative power bases are there?
- Return to civilian rule planned?
If one-man, one-party state
- What if present leader dies?
- Are various ethnic groups represented in government?
- Is military large enough to be a major contender for power?
- Is civil service strong and independent?
- Is opposition effectively organized: does it have moral stature?
- Are there specific interest groups opposing the regime?
D. Sources of potential unrest
- Is there a suppressed minority group?
- Are the students, intellectuals, civil servants, military, businessmen, or public opinion alienated from government?
- Are there conflicts between the central government and traditional, regional centres of power?
- Is strong foreign influence resented?
- Is unemployment high?
- Has the cost of living risen sharply without offsetting wage increases?
- Is corruption widespread? Who are the victims?
- Is there a sense that the government is unusually ineffective or that there is no economic progress?
- Is economic progress confined to the centre or purposely spread over the country as a whole?
- Do the farmers own the land they till or are they mostly tenants with absentee landlords?
- Is the economic gap between elite and the populace widening or narrowing?
E. Drastic political changes
- Will a change in government or a coup lead to a drastic change in political orientation or economic chaos?
- Is there a chance of a civil war?
- Would a coup lead to political paralysis and a counterswing?
- Would the next political regime be more/less likely to renounce or reschedule debt for political/ideological reasons?
II. External aspects
A. Dangers of war
- Is the area as a whole explosive or calm?
- Are there major sources of conflict with neighbours?
- Will war seriously impair the economy?
B. Economic relations
- Is there a threat of an effective economic boycott?
- Are relations with major donors stable?
- Are relations with World Bank and IMF healthy?
- Are there plans for political agreements with major trade-blocs for ensured access to major markets?
- Does the county want to increase US investment and trade?
- Does the US government have any leverage?