Assignment 4 – What Political Models Might Shape The New Libya, Tunisia 1) Market reforms are important to achieving stable economic and political systems in Egypt and Tunisia because there is a direct correlation between political economy and economic progress. Innovation is the key to long term, large scale economic growth. The creation of new ideas, new companies, and new ways of doing things are necessary to promote such growth. In addition, economic freedom motivates the creation of new companies. As Egypt and Tunisia become more stable and develop strong, democratic governments, it will promote growth, creation of new companies, and motivate outside companies to invest in businesses within these countries. 2) One benefits of investing in countries like Tunisia and Egypt is the newly elected, democratic governments that will hopefully promote new businesses and stimulate growth that did not exist under the prior corrupt dictatorships. Another benefit would be the new found relations being fostered with the United States. Again, this was not the case under the old forms of government. One risk would be the uncertainty surrounding the creation of the newly formed governments. While the hope is that the new democracies of will take root, there is always the possibility of internal unrest. Another risk would the extreme religious fervor, which was a component of the Arab Spring. Libya provides additional challenges for investment due to the total lack of modern infrastructure and never having a prior precedent of an elected government. 3) Islam will play a large role in the development of the economies and businesses that take hold in this area because it is the official religion. As a result, it will have tremendous influence on the many aspect of business. Some of these areas include the roles women in leadership positions and the ethical and cultural