Efficient Capital Markets: A Key to Development

摘要

This study examines USAID activities to promote creation or strengthening of capital markets in developing countries. There are two basic conclusions. First, USAID has been successful in promoting capital market development. The general approach promoted by USAID-emphasizing the strengthening of the government regulatory institutions- is sound, and USAID has been able to contract capable expertise to carry out such projects. Second, an efficient capital market is an important ingredient of a successful development strategy. Though the effects of strengthening of capital markets on poorer strata of society are indirect and long term, they also have important consequences in generating increased investment and creating more productive employment. Moreover, the failure to provide strong oversight of capital markets, evident in the Asian financial crisis of 1997-98, also can have severe adverse consequences for poor people.