Risky business: political risk insurance and the law and governance of natural resources

Abstract

AbstractThis paper explores the implications of political risk insurance (PRI) in the regulation and governance of natural resources sectors in developing countries. Operating in a hybrid public–private sphere, PRI arrangements involve a more complex web of contractual and non-contractual relations than commercial insurance products, and parties to such arrangements are inserted into a much more intricate framework of legal and political governance, with correspondingly broader international and domestic implications. The paper argues that PRI represents a form of government rationality that provides a framework for organising and regulating the behaviour of actors involved in natural resource investments in developing countries. In natural resources projects where tensions regularly exist between the interests of the foreign investor, the host state and local communities, PRI arrangements can reframe the terms of engagement between these various stakeholders and redefine the host state's engagement with the broader international community.