ABSTRACT
A more sophisticated evaluation of political risk might have prevented such behavior. More accurate measures of political risk could also benefit developing countries. More accurate measures of political risk would reveal to less developed countries its comparative attractiveness to investors. The effort is feeble in light of the value more accurate assessment of political risk has to multinational enterprises, developing countries, insurance companies, banks, Overseas Private Insurance Corporation, and the United States government. The survey takes account of the different factors and reasons of investment appeal for a particular industry by classifying industries into market-oriented types as distinguished from resource and processing types. The factors chosen for assessing the market-oriented type of industry are: political environment, labor factors, industrial infrastructure, market environment, foreign investment conditions, external relations and relations with Japan. The development of the Political System Stability Index is based on several considerations.
