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The limited role of small stock exchanges in economic development: A case study of Mozambique and Swaziland


  • Bruce Hearn
  • Jenifer Piesse


The establishment of a successful stock market in a developing economy can provide a major source of development finance, both channelling domestic savings and attracting foreign investment. But small markets generally fail. Two micro-markets, Mozambique and Swaziland, provide an interesting case study to examine the features of new markets in sub-Saharan Africa that differ in a number of ways, including colonial legacy, membership of the Common Monetary Area and the dynamics of the political economy that defines the links between the citizens, the local elite and the state. In both countries, the operational aspects of the stock exchange are clearly inadequate as a means of promoting international investment. Thus, gains from regional integration initiatives or foreign investment are unlikely, as the market's small size and incomplete institutions currently offer limited potential for either domestic or international risk diversification. However, the political economy in both countries is the real barrier to growth.

Suggested Citation

  • Bruce Hearn & Jenifer Piesse, 2010. "The limited role of small stock exchanges in economic development: A case study of Mozambique and Swaziland," Development Southern Africa, Taylor & Francis Journals, vol. 27(2), pages 205-224.
  • Handle: RePEc:taf:deveza:v:27:y:2010:i:2:p:205-224
    DOI: 10.1080/03768351003740522

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    Cited by:

    1. Jenifer Piesse & Bruce Allen Hearn, 2012. "The law of one price: an examination of price integration between Europe and regional markets in Africa," Applied Economics, Taylor & Francis Journals, vol. 44(24), pages 3169-3193, August.


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