AbstractIn view of the rapid growth of international lending and foreign direct investments, the country risk analysis has become extremely important for the international creditors and investors. This paper traces the history of country risk analysis and briefly discusses the methods used by banks, agencies and researchers for evaluating country risk. Both qualitative and quantitative methods have evolved over time and constant research has contributed to the richness and sophistication of these techniques.This paper also reviews some of the statistical/econometric studies on country risk appraisal. While these studies display a distinct chronological pattern of gradual improvements in terms of technique and analytical competence none of them is complete in terms of scope and coverage.