Capital Markets in Developing Countries

This book presents the Capital Market Diagnostics §(CMD) model - a tool for evaluating the level of §development of a country''s capital market. The three§step model first looks at the necessary conditions §for a functioning capital market, such as security §and the rule of law. In the second step, factors §supporting the development of the capital market are §considered, based on the supply-demand relationship §between capital and investment opportunities. In the §third and final step the focus is on the §institutions of the capital market, and the model §provides checklists for the evaluation of these §institutions.§The book also describes a field study implementation §of the model, carried out in Georgia in 2006. This §field study provided an opportunity to test and §improve the model, but it also yielded a description §of the Georgian capital market and its specific §problems at that time.§In addition to this the book provides a research §overview of the relationship between financial §system development, capital markets and economic §growth. This overview is of value to anyone §interested in the role of capital markets in §developing countries.