Are "Wikipedia-Surfing Kissinger Wannabes" Killing the Political Risk Field?

A few thoughts about a contentious BofA conference that went awry.

Photo by ev on Unsplash

The hard-working staff here at Drezner’s World had made no secret of its skepticism regarding the political risk field. To be sure, there are plenty of talented people working in that space. As I argued in The Ideas Industry, however, this space is also home to a lot of thought leaders who are pitching the snake oil of certainty in an uncertain world.

Tina Fordham is someone who works in this space and is decidedly not selling snake oil. So I read with some amusement her latest for the Financial Times, in which she provides a wicked autopsy of a Bank of America (BofA) geopolitical conference that apparently went very far off the rails. What was supposed to be a two-day online event got scrubbed with three sessions to spare and BofA officials calling clients to apologize for the content.

Fordham’s assessment is brutal: “It was therefore only going to be matter of time before the lack of established best practices in geopolitical analysis collided with the degree of personal preference involved in producing investor briefings and caught a financial institution out.”

Drawing on the FT’s story about the conference, Fordham argued that all too often the likes of BofA outsource their need for political risk analysis to unqualified hacks:

As geopolitical risk has moved to the centre following Russia’s invasion of Ukraine, and predictions ensue about the conflict’s second- and third-order effects, so too has the stampede of what investors call “tourists” — neophytes wading into asset classes they know nothing about.

In the case of geopolitics, this phenomenon is possibly even more painful to observe, thanks to the misbegotten notion that political analysis is little more than formulating an opinion after a bit of Wikipedia-surfing, amplified by the rich-dude phenomenon that being good at one thing (making money) makes your opinion valuable on everything….

Trailing behind are the actual geopolitical experts. Most of these are trained in political science, regional studies or political economy, some have hands-on experience with assessing which risks will impact markets and the economy, and a smaller subset do so using data and some degree of methodological rigour.

Fordham concludes, “the aftermath internally at Bank of America won’t be pretty, but it would be wrong to simply stop providing these briefings to clients…. just improve quality control, for God’s sake.”

This all sounds thoroughly consistent with my prior beliefs about how a lot of the political risk field works. That, plus Fordham’s spicy prose, makes her column a delicious intellectual morsel.¹

The thing is, after I read the original FT article by Jonathan Wheatley about the BofA conference, I’m afraid to say that I don’t know if the actual story jibes with Fordham’s assessment. There are a lot of quotes from attendees who clearly had objections to some of the content. But the Wheatley’s reporting provides only two specific examples of alleged bad behavior by geopolitical analysts:

Two people on the call said Daniel Sheehan, BofA Securities’ senior vice-president for international relations, was critical of Ukrainian president Volodymyr Zelenskyy, describing him as “a master manipulator and mimic” about whom there were “serious concerns” in the US administration. A spokesperson for Zelenskyy did not immediately respond to a request for comment.

A BofA spokesperson said the bank disagreed with this interpretation of Sheehan’s remarks, which had been intended to reflect the views of others, rather than his own.

One of those present said they felt one speaker, Nicolai Petro, a professor of political science at the University of Rhode Island, “said stuff that was absolutely shocking . . . it was straight out of the foreign ministry of Russia”….

In his prepared speech, which he shared with the FT, Petro’s remarks included: “Under any scenario, Ukraine would be the overwhelming loser” in the war. Its industrial capacity would be “devastated”, partly by its economic policy of becoming an agricultural superpower “as recommended by the EU and the United States” and its population would continue to shrink as people left to look for employment abroad….

He said the US government had no interest in a ceasefire because it had the most to gain from a prolonged conflict through a “dramatic increase in EU energy and military dependence on the US”.

Okay, so a few things:

1. Sheehan’s comments, while impolitic, are note entirely wrong. Zelenskyy is a talented actor and comedian — of course he would be good at mimicking and emotional manipulation. It’s also likely true that the Biden administration has some concerns about Zelenskyy.² After all, we know from this past week that the U.S. knows a lot more about Russian plans than Ukrainian plans. Uncertainty naturally breeds concern.

2. I vehemently disagree with Petro’s analysis. For example, the claim that the United States wants the war to continue is absurd. The U.S. would like the conflict to end for a variety of reasons: lowering inflation risks, eliminating the drain on U.S. munitions, and permitting a greater focus on China. Most of the rest of Petro’s analysis sounds more like a critique of neoliberalism than anything pertaining to Ukraine.

3. That said, Petro is not some Wikipedia-surfing rich dude pontificating to other rich dudes. His biography and publications suggests he possesses the exact kind of deeply-researched bona fides that Fordham prefers. He might be wrong — I think he is — but he’s not ignorant about Russia or Ukraine.

On general principle, I think Fordham’s larger point stands. The specific case of this BofA conference, however, doesn’t provide the precise empirical support that Fordham suggests. BofA’s error here is not that selected speakers who did not know anything about the region; it’s that they did not sufficiently vet what their views were prior to hiring them.

1. Also, props to the editor who chose the photo that accompanied Fordham’s column: ten out of ten, no notes.

2. More on this point in a few days.