How can a nation transform its capital market into a dynamic, wealth-creating engine for the economy or even into a financial hub?

Vital components for this effort include patient reputation building, high performance standards, a resilient infrastructure, and a robust regulatory framework. But in our experience, vision, political commitment, and, above all, leadership make the real difference between success and failure. Just as those factors frequently determine the outcome of a corporate change initiative, so national efforts to build or improve capital markets bear fruit only when someone, or perhaps a group of people, articulates the need for reform and implements a carefully structured program.

Too few countries, however, are capturing the value from this opportunity. We believe that many more of them can share in the wider economic benefits of a transformed capital market—if they can exhibit the sort of determined leadership underpinning current reform in nations as diverse as Singapore, Malaysia, and Saudi Arabia.

Economists agree on the value of well-functioning capital markets, yet many politicians and leaders still need to be convinced. The clear correlation between deep capital markets (as measured by bonds and equities volumes) and economic development (as measured by per capita GDP, for instance)...