For all the issues that can crop up with property rights around the margins in the US, the EU, and any other established democracies, doing business in a country where decades or centuries of history has established a strong general belief in property rights and the rule of law gives you a very strong set of baseline protections. Abandoning that for a brand new country where what one guy says goes introduces a whole new kind of risk that most of us here at HN are not used to dealing with and factoring in.
For example, requiring a dictator to post bond is all well and good until he decides at some point while you're within his borders that he's going to (a) kill you, in which case collecting on the bond won't you much good, though it will soften the blow for your investors, or (b) start cutting off toes and fingers until you release the bond. (Obviously you could structure the bond in such a way that option (b) is unworkable, which means that it either becomes a straight up hostage ransom situation, or reduces to option (a).)
Even given all of that, you're right that it still might make sense to do business there for a particular kind of business given a particular risk tolerance. It might well be an experiment worth trying. By the same token, if you develop a new kind of versatile routing software that does an especially good job of finding the optimal approach to trying to route materials past someone who is actively trying to stop you, selling it to Mexican drug lords might be an experiment worth trying. Just make sure you have a really good idea what you're getting into and that the risks to your person as well as your business are worth it to you.
For example, requiring a dictator to post bond is all well and good until he decides at some point while you're within his borders that he's going to (a) kill you, in which case collecting on the bond won't you much good, though it will soften the blow for your investors, or (b) start cutting off toes and fingers until you release the bond. (Obviously you could structure the bond in such a way that option (b) is unworkable, which means that it either becomes a straight up hostage ransom situation, or reduces to option (a).)
Even given all of that, you're right that it still might make sense to do business there for a particular kind of business given a particular risk tolerance. It might well be an experiment worth trying. By the same token, if you develop a new kind of versatile routing software that does an especially good job of finding the optimal approach to trying to route materials past someone who is actively trying to stop you, selling it to Mexican drug lords might be an experiment worth trying. Just make sure you have a really good idea what you're getting into and that the risks to your person as well as your business are worth it to you.