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11. The Anatomy of Cyber Risk

Author:
Rustam Jamilov, Hélène Rey, and Ahmed Tahoun
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper employs computational linguistics to introduce a novel text-based measure of firm-level cyber risk exposure based on quarterly earnings conference calls of listed firms. Our quarterly measures are available for more than 13,000 firms from 85 countries over 2002-2021. We document that cyber risk exposure predicts cyber attacks, affects stock returns and profits, and is priced in the equity option market. The cost of option protection against price, variance, and tail risks is greater for more cyber-exposed firms. Cyber risks spill over across firms and persist at the sectoral level. The geography of cyber risk exposure is well approximated by a gravity model extended with cross-border portfolio flows. Back-of-the-envelope calculations suggest that the global cost of cyber risk is over $200 billion per year.
Topic:
Economics, Markets, Cybersecurity, Business, and Risk
Political Geography:
Global Focus

12. Anticorruption Guidance for Partners of State-Owned Enterprises

Author:
Alexandra Gillies and Tom Shipley
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Drawing on broad stakeholder consultations, corruption case analysis and reviews of existing best practices, this guidance proposes concrete measures that international oil, gas a mining companies should adopt to reduce corruption risks in their work with state-owned enterprises (SOEs) in the oil, gas and mining industries. It also recommends measures SOEs can take to strengthen their anticorruption safeguards. The guidance for private-sector companies has five parts: Conducting due diligence on SOEs; Avoiding high-risk agents; Responding to political exposure; Safeguarding payments; Protecting joint ventures from corruption. The final section identifies corresponding recommendations for SOEs in each of these five areas.
Topic:
Corruption, Natural Resources, Business, Risk, and State-Owned Enterprises
Political Geography:
Global Focus

13. The Social Side of Climate Change Adaptation: Reducing Conflict Risk

Author:
Farah Hegazi and Katongo Seyuba
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Stockholm International Peace Research Institute (SIPRI)
Abstract:
In developing countries, the effects of climate change interact with factors such as underdevelopment, high dependence on natural resource-based livelihoods, inequality, weak state institutions and marginalization to increase the risk of insecurity and violent conflict. Along with sustainable development and climate change mitigation, climate change adaptation is another key entry point for addressing climate-related security risks. However, key social factors that could positively influence adaptation outcomes and ultimately mitigate climate-related security risks are often overlooked. This SIPRI Policy Brief offers insights into the importance of social capital for facilitating climate change adaptation and preventing and resolving natural resource-related communal conflict in developing countries. The policy brief recommends: (a) improving trust between communities and governments through collaborative processes for knowledge exchange, setting priorities and determining appropriate climate change adaptation practices; and (b) increasing knowledge of climate change among traditional and local leaders to strengthen local conflict resolution mechanisms.
Topic:
Climate Change, Conflict, Risk, Social Capital, and Adaptation
Political Geography:
Global Focus

14. Gender Dimensions of Climate Insecurity

Author:
Elizabeth Smith
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Stockholm International Peace Research Institute (SIPRI)
Abstract:
Gender is a traditionally under researched dimension in scholarship on climate and security. However, as recent research has noted, it is a variable that cannot only shape how different groups of individuals are affected by climate-related security risks. Gendered norms and power structures can also increase or mitigate the likelihood of climate-related security risks. This SIPRI Insights contributes to the growing body of research on gender, climate and security by analysing the gender dimensions of the four pathways of climate insecurity featured in past SIPRI studies: (a) livelihood deterioration, (b) migration and changing mobility, (c) tactical considerations of armed groups and (d) elite exploitation and resource mismanagement. It reviews literature to highlight how gender can influence resilience and risk for different groups of men and women within the pathways. Where relevant, it also discusses how gender may serve as an instigating factor for the respective pathways. The paper stresses the need to critically understand the different and interlinked experiences of diverse groups of men and women in the pathway contexts and to ensure equal leadership and participation of all affected groups in addressing climate-related security risks.
Topic:
Security, Climate Change, Risk, Peace, and Gender
Political Geography:
Global Focus

15. April 2022 Issue

Author:
Stephen Hummel, F. John Burpo, Jeremy Hershfield, Andrew Kick, and Kevin J. O'Donovan
Publication Date:
04-2022
Content Type:
Journal Article
Journal:
CTC Sentinel
Institution:
The Combating Terrorism Center at West Point
Abstract:
The COVID-19 pandemic has claimed nearly one million American lives. It has upended many more and produced disastrous consequences around the world. But it could have been even more catastrophic had Western nations and companies not developed highly effective vaccines. As the world hopefully begins to emerge from the pandemic, it is important to reassess the global biological threat landscape, including the possibility that bioterrorists or other bad actors might seek to exploit advances in biotechnology to engineer a future pandemic. In a joint effort, the Combating Terrorism Center and the Department of Chemistry and Life Science at West Point have assembled some of the best and brightest thinkers in the counterterrorism, policy, and scientific communities around the world for their perspectives and analysis on the evolution of the biological threat picture. The result is a two-volume set of special issues, with the second volume being published next month. The feature article of this volume anticipates how bioterrorists may exploit tunable viral agents in a new age of bioterrorism. The article is authored by Major Stephen Hummel and Colonel F. John Burpo with Lieutenant Colonel Jeremy Hershfield, Lieutenant Colonel Andrew Kick, Kevin O’Donovan, and Colonel Jason Barnhill. They write: “Components of a disease such as transmissibility, lethality, and the infectious window can potentially be modified for desired tactical, operational, or strategic effects. While this capability is currently beyond the skills and knowledge of the biology enthusiast, a trained individual would possess such skills and knowledge, though they may lack the necessary material and infrastructure support. Hence, it is necessary to develop and maintain capabilities that can respond to a variety of pathogens and possible effects.” This issue features an interview with Lawrence Kerr, who until his retirement from government service earlier this year was the Director of the Office of Pandemics and Emerging Threats in the Office of Global Affairs at the U.S. Department of Health and Human Services. We also interview Brad Ringeisen, the Executive Director of the Innovative Genomics Institute. Before his retirement from government service in July 2020, Dr. Ringeisen served as the Director of the Biological Technologies Office at the Defense Advanced Research Projects Agency (DARPA). Filippa Lentzos, Gregory Koblentz, and Joseph Rodgers argue “the biological risk landscape is rapidly evolving and presents significant new challenges to preventing the accidental, reckless, or malicious misuse of biology. At the same time, oversight systems to ensure that life sciences research is conducted safely, securely, and responsibly are falling behind. An urgent overhaul to realign biorisk management with contemporary risks is needed.”
Topic:
Health, Counter-terrorism, Risk, Pandemic, and Bioterrorism
Political Geography:
Global Focus

16. News and Noise in Crime Politics: The Role of Announcements and Risk Attitudes

Author:
Wolfgang Maennig and Stefan Wilhelm
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
We examine the short- and medium-term effects of announcements of changes in anti-crime policies in the distant future (news shocks) and provide a first extension of the analysis to cases where the announced policy changes may not be realized in the end (noise shocks). We further innovate by analyzing the effects of policy changes that increase the variance while holding the expected values of policy instruments constant. We confirm that news shocks can bring about immediate changes in delinquency. However, announcements of tighter anti-crime policies may even increase delinquent activities, at least temporarily. In the case of noise shocks, we observe persistent reactions of potential offenders, indicating that a credible communication strategy may generate an impact on crime politics. Finally, increasing the variance of policy instruments without changing the mean expected detection rate may have similar effects.
Topic:
Crime, Law Enforcement, Economic Policy, Risk, and Attitudes
Political Geography:
Global Focus

17. Allocation of Climate-Related Risks in Investor–State Mining Contracts

Author:
Martin Dietrich Brauch, Perrine Toledano, and Cody Aceveda
Publication Date:
06-2022
Content Type:
Special Report
Institution:
Columbia Center on Sustainable Investment
Abstract:
As the effects of climate change continue to worsen, mining projects, the communities surrounding them, and their host states are increasingly at risk of being affected by environmental disasters, with devastating social and economic consequences. Risk allocation provisions included in investor–state mining contracts, often considered boilerplate and replicated in agreements without careful consideration or negotiation, could potentially help the parties assign responsibilities between themselves and limit their losses in those cases. However, traditional risk allocation clauses within existing mining contracts, formulated before the world acknowledged the severity of climate change, do not adequately allocate climate-related risks and impacts between states and companies.
Topic:
Climate Change, Environment, International Cooperation, United Nations, and Risk
Political Geography:
Global Focus

18. Corruption risks loom large over financing of green infrastructure

Author:
Creon Butler, Sean Hagan, and Dominic Martin
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Governments and public international organizations are making a concerted effort to provide large amounts of money to reduce emissions of greenhouse gases (climate mitigation) or adapt to the effects of climate change (climate adaptation). But there is a significant risk that the infrastructure projects where much of this climate financing will need to be targeted will be undermined by corruption—from bribery and kickbacks to fraud and embezzlement. The threat is increased by the scale of the climate financing being provided and the speed with which the required projects need to be completed. This Policy Brief identifies key corruption risks that threaten climate infrastructure financing and the best practices that can alleviate these risks.
Topic:
Climate Change, Corruption, Infrastructure, Risk, Carbon Emissions, and Green Transition
Political Geography:
Global Focus

19. Taking Stock of Early Warning for Atrocity Prevention: Report from the 2021 Sudikoff Interdisciplinary Seminar on Genocide Prevention

Author:
Mollie Zapata
Publication Date:
02-2022
Content Type:
Special Report
Institution:
Simon-Skjodt Center for the Prevention of Genocide, United States Holocaust Memorial Museum
Abstract:
This report compiles essays from several leading experts who participated in the seminar series. We asked them to reflect on one or more key themes and offer recommendations for research and/or policy initiatives that could help current and future leaders address mass atrocities. The collection of essays comprises diverse perspectives and spans reflections on everything from technical approaches to forecasting to practical recommendations on communicating risk to the overall efficacy of forecasting projects. Quscondy-Mohamed Abdulshafi provides recommendations for how mass atrocity monitoring and preventive interventions can make use of social media-generated big data and artificial intelligence (AI), and suggests the need for a strategic collaboration between social media companies and mass atrocity research institutions. Chiara De Franco discusses warning as persuasion, including the importance of clarity and specificity in the content of the warnings, the relationship between the warners and those expected to act on the warning, and the importance of developing a warning strategy that fits into the “swirl of intelligence” continuously confronting policy makers. Håvard Hegre outlines and weighs the benefits of different prediction targets. He argues that the field should move towards “continuous multi-period incidence” (CMPI) targets to avoid arbitrary coding thresholds, enable models to better use available information, and allow for a more nuanced approach to uncertainty in evaluating and describing results. Victor Okorie addresses the role of researchers in situations where atrocity risk is present, and describes the ethical and logistical challenges of those seeking to conduct research where gatekeepers and conditions demand loyalty to the state. In such circumstances, Okorie argues that researchers are obligated to take on an activist role, portray both victims and perpetrators, and strive for objectivity and reflexivity. Clionadh Raleigh questions the assumption of many early warning and prediction models that more accurate, timely warnings will result in the prevention of conflict. She argues that global models attempt to create consistency across cases where none actually exists, and that projects' focus on catastrophic events misses the need for response to low-level threats. She recommends a revised approach to early warning focused on studying each unique environment. Paul Slovic provides an overview of three psychological mechanisms that impede the impact and effectiveness of early warnings: psychic numbing, pseudoinefficacy, and the prominence effect. He concludes with recommendations for those who have been (or may become) victims of atrocity crimes, government officials, non-governmental organizations (NGOs), and the public.
Topic:
Political Violence, Social Media, Risk, Atrocities, and Monitoring
Political Geography:
Global Focus

20. Can Emerging Technologies Lead a Revival of Conflict Early Warning/Early Action? Lessons from the Field

Author:
Branka Panic
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Center on International Cooperation (CIC)
Abstract:
The early warning/early action (EWEA) community has been working for decades on analytics to help prevent conflict. The field has evolved significantly since its inception in the 1970s and 80s. The systems have served with variable success to predict conflict trends, alert communities to risk, inform decision makers, provide inputs to action strategies, and initiate a response to violent conflict. Present systems must now address the increasingly complex and protracted nature of conflicts in which factors previously considered peripheral have become core elements in conflict dynamics.
Topic:
Science and Technology, Conflict, Risk, and Early Warning
Political Geography:
Global Focus