Published date: Feb 01 2023

Journal Title: KnE Social Sciences

Issue title: Economies of the Balkan and Eastern European Countries (EBEEC)

Pages: 30–44

DOI: 10.18502/kss.v8i1.12633

Efstratios Kyprioteliskypriot@uoi.grLecturer, Department of Accounting and Finance, University of Ioannina, Ioannina, Greece

Georgios KoliasAssistant Professor, Department of Accounting and Finance, University of Ioannina, Ioannina, Greece

Paraskevi PappaLecturer, Department of Accounting and Finance, University of Ioannina, Ioannina, Greece

The 2006 Global Risks Report sounded the alarm on pandemics and health-related risks. Unsurprisingly, the global pandemic became a reality, and the immediate human and economic costs were affected. The efficiency of managing risks is accompanied by high levels of uncertainty, and the planning is unable to ensure accountability and yield reliable projections. This work aims to examine the complex system of risks and their interconnectivity with COVID-19 pandemic. Each risk itself may be considered a complex system that upon interaction with the global system of risks might be unstoppable and trigger a sequence of catastrophic events. This calls for a systematic examination of risks in a complex system to project the probability of risks becoming events, initiated by the COVID-19 pandemic. Risks have proliferated in recent years and the pandemic is an ascending factor. This paper analyzes the risks indicated by World Economic Forum, The Global Risk Reports from 2006 to 2022. We form our model by defining the risks associated with COVID-19 pandemic. The association between risks accelerating the probability of risk occurring, and increasing its impact. The most important elements are the virtually unheard factors produced in a fast-changing environment, which changes so fast because the system of factors is not a national or regional one, but the world functions uniformly. Informative and predictive functions under this reality does not provide information for the future, and the more important qualification of this information is uncertain unless the information from the past and the present has all the qualitative historical data, and the proportionate analysis is used. Dealing with risk under the development of a model would result in exclusion of certain factors or variants from this model, which could become a restricted perception and subject of imposing certain influential theories which demolished in conflict with reality. Risk events demonstrate the success and failure of risk management, which consistently point to poor planning as a major cause of risk management failure. This may be not the only reason for poor planning under conditions of high uncertainty. Furthermore, business is unaware of risk governance and lacks an understanding of risk situations, promoting individualism when governance necessitates broader participation. This lack of understanding or refusal of collective contribution is a societal malfunction and an avoidance of corporations’ respective responsibilities in social welfare.

Keywords: COVID-19, global risks, economic crisis, risk management, governance

[1] Beck U. What is globalization? Cambridge, UK: Polity Press; 2009.

[2] Beck U. World risk society. Cambridge, UK: Polity; 1999.

[3] Blinder AS. After the music stopped: The financial crisis, the response, and the work ahead. New York: Penguin; 2013.

[4] Cambridge Centre for Risk Studies. Global Risk Index 2019 Executive Summary. Cambridge, UK: Cambridge Centre for Risk Studies, University of Cambridge; 2018.

[5] Centeno MA, Cohen JN. Global capitalism: A sociological perspective. Cambridge, UK: Polity; 2010.

[6] Centeno MA, Cohen JN. The arc of neoliberalism. Annual Review of Sociology. 2012;38:317–340.

[7] Centeno MA, et al. The emergence of global systemic risk. Annual Review of Sociology. 2015;41:65–85.

[8] Rong-Gang Cong R-G, Shen S. Relationships among energy price shocks, stock market, and the macroeconomy: Evidence from China. The Scientific World Journal. 2013;2013:171868. https://doi.org/10.1155/2013/171868

[9] Dionne G. Risk management: History, definition, and critique. Risk Management and Insurance Review. 2013;16(2):147–166.

[10] Epstein JM. Modelling to contain pandemics. Nature. 2009;460:687

[11] Fratzscher M, Schneider D, Robays IV. Oil prices, exchange rates and asset prices. ECB Working Paper Series. Frankfurt, Germany: European Central Bank; 2014.

[12] Galaz V, Tallberg J, Boin A, Ituarte-Lima C, Hey E, Olsson P, et al. Global governance dimensions of globally networked risks: The state of the art in social science research. Risk, Hazards & Crisis in Public Policy. 2017;8(1):4–27

[13] Helbing D. Globally networked risks and how to respond. Nature. 2013;497(7447):51– 59.

[14] Held D, McGrew AG, editors. Globalization theory: Approaches and controversies. Cambridge, UK: Polity; 2007.

[15] Kypriotelis E, Arnis N, Kolias G. Global, regional and local perspectives on the economies of southeastern Europe. Springer Proceedings in Business and Economics. Horobet A, Belascu L, Polychronidou P, Karasavvoglou A, editors. Cham: Springer; 2021. Qualitative criteria and the performance of the global economy.

[16] Kypriotelils, et al . Global risks and their impact on the economy of Balkan countries. EBEEC Conference proceedings, Opatija, Croatia; 2020.

[17] Lin X, Moussawi A, Korniss G, Bakdash JZ, Szymanski BK. Limits of risk predictability in a cascading alternating renewal process model. Scientific Report. 2017;7:6699.

[18] Niu X, Moussawi A, Korniss G, Szymanski BK. Evolution of treats in the global risk network. Applied Network Science. 2018;3:24.

[19] Rothstein H, Huber M, Gaskell G. A theory of risk colonization: The spiralling regulatory logics of societal and institutional risk. Economy and Society. 2006;35(1):91–112.

[20] Slovic P, Fischhoff B, Lichtenstein S. Rating the risks. Environment: Science and Policy for Sustainable Development. 1979;21(3):14–39.

[21] Szymanski B, Lin X, Asztalos A, Sreenivasan S. Failure dynamics of the global risk network. Scientific Reports. 2015;5:10998.

[22] Vespignani A. The fragility of interdependency. Nature. 2010;464:984–985.

[23] Wilkinson A, Kupers R, Mangalagiud D. How plausibility-based scenario practices are grappling with complexity to appreciate and address 21st century challenges. Technological Forecasting and Social Change. 2013;80(4):699–710.

[24] World Economic Forum. Global risks report 2006. 1st ed. Available from: http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2006.pdf

[25] World Economic Forum. Global risks report 2018. 13th ed. Available from: http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2012.pdf

[26] World Economic Forum. Global risks report 2018. 13th ed. Available from: http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2018.pdf

[27] World Economic Forum. Global risks report 2021. 16th ed. Available from: http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2021.pdf

[28] World Economic Forum. Global risks report 2022. 17th ed. Available from: http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2022.pdf