Geopolitical risk: a structural model based on the Hobbesian theory of the role of States

What it is about

Eliel Jiménez presented at the Fourth Annual Risk Conference (September 16, 2026) the Hobbesian Geopolitical Risk Index (IHRG), his own model that seeks to answer whether the world is living through a structural or a cyclical change in its international order.

The 37 slides start from the theses of Hobbes and Locke on the State, illustrate the idea with the cases of El Salvador, Haiti and European rearmament, and build the index on four pillars: military coercive power, economic coercive power, strategic resilience and political cohesion. They show the 2000 to 2022 series, its 2024 update and a Monte Carlo robustness test, and close with the implications for banking, insurance and risk management, and with the opportunities and challenges for the Dominican Republic.

Objectives

• Explain why geopolitical risk requires a prior theory of what is measured, and not only a count of headlines or events.
• Present the four pillars and formulas of the IHRG and how its zones are interpreted.
• Derive implications for risk appetite, sovereign and counterparty risk, and the Dominican case.

Key takeaways

1. The model distinguishes a Lockean order, where order is settled and markets and rules prevail, from a Hobbesian state, where security and order itself come first.
2. The index is read by zones: below 30, stable Lockean order; 30 to 50, transition; 50 to 70, Hobbesian tension; above 70, Hobbesian state.
3. According to the author, the index crossed the tension threshold in 2009, closed 2022 at 65 and reached 68.77 in 2024, a new high; in the Monte Carlo test with 10,000 iterations, 100% of the simulations exceeded 50.
4. For risk management he proposes moving from optimizing expected return to actively managing sustained variance, and shortening the time between detecting a risk and deciding.
5. For the Dominican Republic he points to the free-zone exports to the United States rising from 51% in 2019 to 72% or 73% between 2022 and 2025 as an opportunity, and to 81.8% of fuel imports coming from a single supplier as a challenge.