Assessing Risk in Transatlantic Relations

June 3, 2011

On June 3-5, 2011, the American-German Institute (AGI) convened a group of young transatlanticists for a workshop on “Assessing Risk in Transatlantic Relations” with the generous support of The German Marshall Fund of the United States. During the two-day workshop, the following key factors were discussed:

The following pillars are used to handle risks: Risk identification, risk assessment, risk mitigation or management, and risk communication.

Risk is usually assessed through previous experience. This makes risk assessment difficult for individuals as well as for governments as new challenges might not conform to previous experiences. Governments are especially engaged in dealing with current crises at the expense of future crises. Government funding and initiative is thus short-term. Regulations address only previous market failures not future problems, which cannot be anticipated. An additional factor is that human beings are evolutionarily conditioned to be able to assess short-term risks; however, they are not adapted to assess long-term risks very well. This is especially problematic on questions of risk management and climate change.

Governments are usually organized in silos, which is counterproductive for assessing situations through multiple lenses. Governments are not equipped to deal with global interconnected threats. Additionally, risk and problems are ongoing issues, which no longer have a fixed start and end date.

Public-private partnership can be one of the solutions to overcome short-term funding, initiative, and lacking interconnectedness.

The commonly accepted perception that Americans are risk-loving while Europeans are risk-adverse holds true in certain areas such as in the business sector. However, in terms of security risks this is usually reversed.

The question is also who bears risk in a society. Apart from individuals and the state, insurance is traditionally one way of risk mitigation. However, insurance also has the unattended consequence that people are taking more risk because their personal responsibility has been diminished. Additionally, distorting regulations can lead to the problem that benefits are privately reaped, whereas risks are borne by the public (e.g., the Deepwater Horizon accident).

New technology creates the need to develop a new way of government communication as it changes the way we communicate. Technology and the rapid spread of news can also lead to quick reactions that do not always take risks and facets of problems adequately into account. Risk communication becomes an important element of government communication, but has been handled differently by politicians in Germany and the U.S. More insight into risk communication across the Atlantic and the different expectations of the publics is therefore needed.