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Subject 4. Assessing Geopolitical Actors and Risk PDF Download

A geopolitical framework for analysis includes four archetypes of country behavior. Each archetype has its own costs, benefits, and tradeoffs with respect to geopolitical risk.

Autarky. A country is said to be in a complete state of autarky if it has a closed economy, which means that it does not engage in international trade with any other country. The motivation is usually a combination of securing the supply of important goods and a desire to reduce the dependence on other nations in general. Example: North Korea.

Hegemony. Hegemonic nations frequently serve as regional or world leaders and exercise political or economic dominance over others in order to maintain control over resources. A country with a hegemonic system can influence global affairs while countries aligning themselves with the hegemon's rules may enjoy rewards from the global leader; however, as a hegemon's influence changes, it may become a more competitive, increasing geopolitical risk.

Multilateralism. These are nations that engage in rule-harmonization and mutually beneficial trade agreements. Their individual businesses have several trading partners and are totally linked to global supply chains.

Bilateralism. Bilateralism is the practice of two nations cooperating in the political, economic, financial, or cultural spheres. Even though bilateral agreements are made one at a time, governments that engage in bilateralism may have relationships with several distinct nations. Japan was once a bilateral country that built a strong export market for its products.

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