Editorial Review of
Global Insight

Global Insight, formerly DRI-WEFA, brings hard-core econometrics to bear on the fluffy field of political risk. GI's basic country analysis and ratings focus on economic issues like exchange rates, inflation, and growth, and seems aimed squarely at equity and bond traders.

But GI also provides a unique set of risk ratings that are far more broad -- covering everything from the risk of a stock market downturn to the probability of a military coup -- but seem to have nothing to do with the written analysis. These ratings are set apart by the willingness to get statistical. A couple Harvard PhD's reportedly came up with GI's econometric model that estimates probabilities for all sorts of political risk events -- the probability of a war, a coup, an exchange rate crisis, violations of property rights, and so on, over the next one or five years.

The selection of risks is spot-on for direct investors, the customization to particular industries is ahead of the competition, and the sexy quantitative methodology has made GI popular with those who like to think themselves on the cutting edge. (For instance, the risk manager at Enron.)

GI recently acquired World Markets Research (see separate entry) so some big changes are no doubt in the offing. Because GI is accustomed to dealing with moneyed Wall Street types, it tends to overcharge for its services.

http://www.globalinsight.com