High impact, low probability risk and related events in political rsk analysis: an evaluation of the Black Swan

[摘要] ENGLISH ABSTRACT: This thesis conducted an evaluation on the Black Swan theory, developed by Nassim Nicholas Taleb and its applicability in Political Risk Analysis (PRA). The theory is based on three primary characteristics speaking to events which take place that cannot be forecast because; (1) the event has a low occurrence probability due to its unknown unknown status and therefore cannot be identified. As a result (2) the impact of this event is significantly devastating as it changes a country's social, political and economic trajectories. However, although the event could not have been identified in order to approach it before its occurrence, (3) Taleb says that risk analysts and decision makers conduct a Narrative Fallacy after the fact where they identify indicators which would have pointed to its fruition. However, there are several quantitative and qualitative methods in PRA which have been used to approach high impact, low probability risks and related events. The thesis considers how the concept of PRA has developed and expanded to include measures which aid risk analysts in accurately forecasting and approaching events of this nature. The thesis then assesses a variety of qualitative and quantitative approach strategies to show this. This also presented critiques, oppositions and alternatives to Taleb's theory as the applicability of the Black Swan as a classification in PRA was then evaluated. This led to the development of the Novice Approach which was then applied to three examples in Jordan, Britain and America respectively. Here, Actors, Factors, Time (opportunity) and Location were used as the four primary indices to analyse and approach the terrorist attacks which took place at music festivals. In doing so, it was shown that scenarios such as these should be classified as high impact, low probability events in PRA and not as Black Swans. Furthermore, the impact these events may have on a country can be predetermined by the socio-political status and resource availability and capacity, meaning that the relative approach or mitigation strategy can be implemented. The study then concludes by saying that the Black Swan cannot be applied as a classification of events in PRA.

[发布机构] Stellenbosch University