The SAIS Review of International Affairs has published its newest issue, Hidden Risks: Challenges for the International System (Winter-Spring 2012, Volume XXXII, No.1). For online access to the full text, please visit Project Muse. Information on print subscriptions can be found at Johns Hopkins University Press.
Identifying, understanding and accounting for risks are some of the most significant tasks conducted by policymakers, academics, and leaders. Risk—or the calculated probability that some undesirable outcome will occur—impacts nearly every aspect of our lives. From insurance to credit analysis, security and terrorism assessments to war gaming, from the burgeoning field of political risk analysis to the halls of our financial institutions, a surfeit of individuals and institutions are tasked with analyzing the risks that impact us every day.
When properly managed, risks can be relatively benign, diversified away in portfolios or countered with security measures. However, when risks are missed, ignored, or miscalculated catastrophe awaits. Economic collapse, as we are experiencing in the Great Recession, wars and regime change, such as the Arab Spring, and natural disasters that we are ill-prepared to respond to can wreak havoc on human life.
Since one of the key roles of government is to protect its citizens, policymakers must be well-equipped with the tools and insights to anticipate and mitigate risks. Yet managing risk is not a role just for the public sector. Businesses must also directly address risk, not just to protect their profits and investments, but in consideration of broader, systemic disturbances that might spill beyond the confines of the firm.
With this in mind, the SAIS Review of International Affairs seeks to foster a discussion on some of the risks that may be hidden, misunderstood, or woefully unaddressed by those who might be most affected by their realization. Some of these risks are more hidden than others. Some are novel. Some are rarely discussed. Others involve some of the biggest issues that face policymakers, but from a new angle or with a new conclusion.
We begin this issue with an interview of Ian Bremmer, the founder and president of Eurasia Group, a premier political risk analysis firm. In our discussion, Bremmer reviews the global outlook, focusing on the changing role of leadership in the international system. He highlights some of the major issues that will dominate headlines over the coming years, offering insight into possible responses.
Our essays begin with a discussion of procedures for policymaking. Risk analysis, at its core, is modeling. But different approaches consider disparate variables, can yield diverse results, and often lead to divergent policy recommendations. The methodologies policymakers use thus have enormous impact on the outcomes and must, a priori, be well thought-out before implementation. Michael F. Oppenheimer tackles this directly, arguing that policymakers must use alternate scenarios— “believable narratives describing how very different futures could emerge from current circumstances” —to effectively challenge implicit biases in policymakers’ assumptions and yield the best possible policy results.
Paul Slovic, Daniel Västfjäll and Robin Gregory tackle psychological impediments to sound policy. Couching their argument in a discussion of genocide, the authors argue that the psychological effects of “psychic numbing” lead policymakers and the public to underestimate the value of human life, particularly during mass atrocity, yielding sub-optimal policy outcomes. By accounting for this effect, policymakers will be better equipped to make informed decisions.
From this methodological discussion, we move to a brief conversation on economics, starting with retrospective analysis of the Great Recession. Nassim Nicholas Taleb and George A. Martin analyze the causes of the economic collapse, laying the blame with irresponsible risk management. The authors explore the causes and outline a few suggestions to avoid such catastrophes in the future. Xiaolu Wang bridges our economic discussion with our regional one, expounding the risks to economic and social development in China from hidden, or gray, income.
Following a geographic focus, the next three essays deal with one of the most pressing issues in international relations: the rise of China. Each, though, offers a novel approach to this well-covered territory. Charles F. Doran offers unique insights on China’s trajectory from the perspective of power cycle theory, providing suggestions on how to successfully and peacefully address changes in the international system. Christopher Ford tackles the China question from a completely different angle. In a critique of American foreign policy, the author objects to excessive reliance on soft power, calling for the employment of other tools to address these challenges. Finally, Marvin Ott addresses Southeast Asia, exploring the potential clash between U.S. and Chinese security interests.
From China, we move west towards India and Pakistan, where Ashok Sharma discusses the risks of war. Shedding light on a well-discussed topic, Sharma hones in on the concept of nuclear deterrence, arguing that instability in the region renders deterrence ineffective, and that a failure to account for this could lead to a massive war.
We conclude our discussion of hidden risks in the Middle East. Jon B. Alterman explores the lessons learned in Libya. He traces the implications of its transition in light of both American policy and the broader context of the Middle East. In a unique discussion of one of the globes most pressing questions—Iran—Matthew Levitt steps away from the standard discourse on the Iranian nuclear program. Instead, he draws out their growing role in the Western hemisphere and the implications this may have on American foreign policy. Our final essay, by Fasil Amdetsion, confronts the Arab Spring through a different lens. Eschewing the standard discussions of oil and Islamist terrorism, Amdetsion explores the region through its water conflicts. He argues that conflict over water in this arid region has explosive potential and must be urgently addressed.
This issue also includes two book reviews. Olumide Abimbola looks at Edward R. Carr’s Delivering Development: Globalization’s Shoreline and the Road to Sustainable Future. Pieter Bottelier reviews Nicholas R Lardy’s Sustaining China’s Economic Growth After the Global Financial Crisis.
We close the issue with the winners of the SAIS Review Prize. Congratulations are due to Anshul Rana for a fascinating discussion of the Indian mujahideen and to Cristina Garafola for an emotive photo essay on democracy in Taiwan. This issue could not have been put together without the hours of hard work from our editorial staff and the guidance of our advisory board. Sincere thanks are due to all who helped in the process.
Written by Josh Grundleger
Josh Grundleger is currently the Editor-in-Chief of the SAIS Review of International Affairs. He is a second year graduate student at Johns Hopkins University School of Advanced International Studies (SAIS) where he is studying American Foreign Policy, Global Theory and History, and International Economics. He is also an author on FutureChallenges.org.