Molfar Intelligence
Source-referenced work on a specific market, partner or deal when an index score is not enough to decide.
Read our reviewPolitical Risk Index by Country: The Main Indices Compared (2026)
What each major political and country risk index measures, how it scores countries, how often it updates and whether it is free, plus how to use a score without being misled by it.
Key Takeaways
- A political risk index compares countries; it does not tell you whether your partner, licence or route is at risk.
- The best-known paid index is the PRS Group's ICRG: 141 countries, monthly, with political risk scored out of 100 across 12 components.
- The best free options are the World Bank's Worldwide Governance Indicators, the OECD Country Risk Classification and credit insurers' country ratings.
- Indices disagree because they measure different things, use different sources and update at different speeds.
- Scores lag events. Annual indices can miss a coup, a war or a sanctions package for months.
- Use an index to shortlist and monitor, then assess the specific decision with evidence.
What Is a Political Risk Index?
A political risk index is a published score or rating that compares countries on how likely political events and government actions are to harm business, and how severe the harm could be.
Indices turn many indicators, such as government stability, conflict, corruption and the rule of law, into one score per country or per dimension. They are useful for comparing markets, setting limits across a portfolio and spotting deterioration. They are not built to answer questions about a specific deal.
Which Political Risk Indices Are There, and How Do They Compare?
The main ones are the ICRG, the World Bank's governance indicators, the OECD classification, credit insurers' country ratings, the Fragile States Index, V-Dem and the EIU's Country Risk Service.
| Index | What it measures | Scale | Coverage | Updates | Access |
|---|---|---|---|---|---|
| International Country Risk Guide (ICRG) PRS Group | Political, financial and economic risk; political rating built from 12 components | Political risk 0–100 (higher is lower risk); composite 0–100 | 141 countries | Monthly | Paid; risk tables from $700 a table a year |
| Worldwide Governance Indicators (WGI) World Bank | Six governance dimensions incl. Political Stability and Absence of Violence/Terrorism | Standardised estimates and percentile ranks | More than 200 economies, 1996–2025 | Annual | Free |
| Country Risk Classification OECD (export credit Participants) | Risk that a country cannot meet external obligations, incl. transfer and convertibility risk and force majeure | 0–7 (7 is highest risk); high-income OECD and euro area not classified | About 140 countries | Reviewed through the year | Free |
| Country risk assessments Coface | Country and sector payment risk for trade credit | Letter grades | 160 economies and 13 sectors (2026 handbook) | Regular updates | Free summaries |
| Country risk ratings Allianz Trade | Country risk for trade credit | Ratings by country | About 195 country reports | Quarterly (Q3 2026 ratings published) | Free reports |
| Fragile States Index The Fund for Peace | State fragility across 12 indicators in cohesion, economic, political, social and cross-cutting groups | Score per indicator, summed | Global | Annual (FSI 2024 report published 18 Feb 2025) | Free |
| V-Dem dataset V-Dem Institute, University of Gothenburg | Democracy and governance, 600+ indicators | Indices 0–1 | All countries, 1789 to present | Annual | Free |
| Country Risk Service Economist Intelligence Unit | Sovereign, currency, banking, political and economic risk | Ratings and scores | Wide country coverage | Regular updates | Paid subscription |
Sources for each row are listed at the end of the page. Coverage and access as published by each provider when we checked.
How Does the ICRG Political Risk Rating Work?
It awards up to 100 points across 12 components, from government stability to bureaucracy quality; higher scores mean lower risk.
The five heaviest components, worth 12 points each, are government stability, socioeconomic conditions, investment profile, internal conflict and external conflict. Corruption, military in politics, religious tensions, law and order, ethnic tensions and democratic accountability are worth 6 each, and bureaucracy quality 4. Political risk makes up half of the composite rating, with financial and economic risk a quarter each, and composite scores of 80 or more count as very low risk (PRS methodology).
The ICRG covers 141 countries and is updated monthly (PRS Group). Single PRS country reports cost $400 and individual risk tables $700 a year, according to the PRS e-store when we checked on 24 September 2026.
What Is the World Bank Political Stability Index?
It is one of the six Worldwide Governance Indicators: Political Stability and Absence of Violence/Terrorism, published annually for more than 200 economies and free to download.
The six dimensions are voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. Data runs from 1996 to 2025 (World Bank). Because it aggregates many surveys and expert sources, it is good for long-run comparison and weak for fast-moving events.
Is the OECD Country Risk Classification a Political Risk Index?
Not exactly. It rates about 140 countries from 0 to 7 on the risk that they cannot meet external obligations, which includes transfer and convertibility risk and force majeure such as war.
Export credit agencies use it to set minimum premium rates, and the OECD says it does not endorse other uses (OECD). A revised model applied from January 2024 gives more weight to governance and climate (EKN). See political risk vs country risk for why the distinction matters.
Which Political Risk Indices Are Free?
The World Bank governance indicators, the OECD classification, the Fragile States Index, V-Dem and the country ratings published by credit insurers such as Coface and Allianz Trade.
Free sources are enough to compare markets and to brief a board at a high level. Paid services such as the ICRG and the EIU's Country Risk Service add monthly updates, forecasts, longer histories and analyst commentary. UK companies can also use two free government sources: UK Export Finance's country cover policy and the FCDO's foreign travel advice.
How Should You Read a Country's Score?
Check the direction of the scale, the date of the data, the components behind the total and how the country has moved over time.
- Direction. In the ICRG a higher score is safer; in the OECD classification and the Fragile States Index a higher number means more risk.
- Date. Confirm when the data was collected, not just when it was published.
- Components. A middling total can hide a very poor score on the one component that matters to you, such as investment profile or internal conflict.
- Trend. A falling score often tells you more than the level.
Why Do Political Risk Indices Disagree?
Because they measure different things, weight them differently, use different sources and update at different speeds.
A credit insurer's rating focuses on whether companies in a country pay their bills; a governance index focuses on institutions; a fragility index focuses on the state's capacity to hold together. All three can be right at once. When indices point in different directions, that is usually a sign the risk is specific to a sector or a type of exposure.
What Are the Limits of a Political Risk Index?
Indices lag events, average a whole country, miss sub-national differences and cannot judge a specific counterparty.
- Lag. Annual data can trail a coup, a war or a sanctions package by months.
- Averaging. One national score hides the difference between a capital city and a conflict-affected province.
- No counterparty view. No index tells you who owns your distributor or whether a regulator is close to a rival.
- False precision. A score to one decimal place can suggest more certainty than the inputs support.
Some providers address the sub-national problem: Sibylline's ASTRA platform, for example, scores 289 countries and sub-national jurisdictions.
How Do You Combine an Index with a Real Assessment?
Use the index to shortlist markets and set monitoring thresholds, then assess the specific decision with evidence on the people, contracts and routes involved.
A practical sequence: screen markets with two or three indices; set a trigger, such as a fall of a set number of points or a downgrade; and commission a decision-specific assessment for any market where you are about to commit capital or sign a partner. Our guides to political risk assessment and how to assess political risk show how. The London political risk consulting firms we compare range from data providers to evidence-led specialists.
Which Indices Moved Most in 2026?
Outlooks for 2026 flagged unrest and conflict risk in large economies; for the year's main reports, see our 2026 outlook summary.
Verisk Maplecroft's outlook, published in December 2025, warned that seven of the world's largest economies were among the countries facing the most disruption from unrest in 2026 (Verisk Maplecroft). For a summary of the year's major reports, see political risks 2026.
Political Risk Consultancies in London That Can Help
These London firms do this kind of work. Scores, strengths and watch-outs for each are in our 2026 ranking.
Economist Intelligence Unit (EIU)
Country Risk Service ratings and forecasts for benchmarking and monitoring a portfolio.
Read our reviewSibylline
The ASTRA platform scores 289 countries and sub-national jurisdictions, alongside analyst access.
Read our reviewCompare the Best Political Risk Consulting Firms in London
We score ten London firms on nine weighted criteria, from evidence traceability and sanctions-exposure mapping to Chambers recognition, and show every sub-score.
Frequently Asked Questions
What is the best political risk index?
There is no single best one. The ICRG is the most widely used paid index; the World Bank's governance indicators are the most widely used free source. Use two or three together.
Is there a free political risk index by country?
Yes: the World Bank's Worldwide Governance Indicators, the OECD Country Risk Classification, the Fragile States Index, V-Dem and the free country ratings of credit insurers such as Coface and Allianz Trade.
What does the World Bank political stability index measure?
Perceptions of the likelihood of political instability and politically motivated violence, including terrorism. It is one of six Worldwide Governance Indicators.
How is the ICRG political risk rating calculated?
It sums scores on 12 components, such as government stability, internal conflict and corruption, to a maximum of 100 points; higher means lower risk.
What does an OECD country risk score of 7 mean?
The highest risk category on the OECD's 0–7 scale for export credits, meaning the greatest risk that a country cannot meet external obligations.
Why do political risk indices give different results?
They measure different things, such as payment risk, governance or fragility, use different sources and update at different speeds.
Can I rely on a political risk index for an investment decision?
Use it to compare markets and set triggers, not as the decision itself. An index cannot assess your partner, licence or contract.
How often are political risk indices updated?
It varies: the ICRG monthly, credit insurers quarterly or more often, and the World Bank governance indicators and Fragile States Index annually.
Who can assess political risk beyond an index score?
Political risk consultancies do decision-specific work. See our 2026 ranking of London firms.
Sources
- PRS Group: International Country Risk Guide
- PRS Group: ICRG methodology
- PRS Group: ICRG risk tables (prices)
- World Bank: Worldwide Governance Indicators
- OECD: country risk classification
- EKN: OECD updates country risk assessment model
- Coface: 2026 Country & Sector Risk Handbook
- Allianz Trade: country reports
- The Fund for Peace: Fragile States Index
- V-Dem Institute: about the project
- UK Export Finance: country cover policy and indicators
- FCDO: foreign travel advice
- Verisk Maplecroft: unrest and polarisation set stage for disruptive 2026
All sources checked 1 October 2026. Company statements are first-party and not independently audited. See our editorial policy and disclosures.
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