Assessing Non-Market Risks
The framework for non-market issue analysis is useful for identifying non-market risks. An issue analysis indicates whether an issue is tending toward a desirable or an undesirable outcome. The analysis also suggests which stakeholders are particularly influential in determining the likely outcome, and why those stakeholders are influential. In addition, the analysis may suggest how less influential stakeholders can play a key role in the issue outcome.
The primary objective of a non-market issue analysis is to provide a qualitative prediction about the resolution toward which an issue is tending. In the case of our electrical transmission line siting example, the analysis may be structured to indicate whether the project is likely to receive regulatory approval to cross the nature preserve. An analysis indicating overwhelming influence in favor of a particular issue outcome suggests relatively low risk for achieving that outcome. Alternatively, an analysis indicating that influence is more balanced among alternative issue outcomes suggests greater risk of realizing any particular outcome.
The issue analysis also indicates which stakeholders are most influential in determining an issue outcome. Moreover, the analysis suggests why particular stakeholders may be more or less influential; be it because they perceive the issue as highly relevant to their interests, because they are more authoritative in bargaining for the issue outcome, or otherwise. Consequently, an issue analysis helps to identify stakeholders for which changes in influence is more likely to result in a change in the likely issue outcome.
Similarly, the issue analysis can be used to identify seemingly less influential stakeholders. Counterfactual variation in various determinants of influence is useful for identifying less-influential stakeholders that increase the uncertainty of realizing the likely issue outcome.
[Stevie: Look for some images for this, or possibly make some informatonal graphs of some kind to indicate the possible ways things could trend...]