1 Introduction 6

2 Defining and measuring capital markets 7

3 The link between capital markets and economic growth 10

  Defining the problem(s) capital markets are supposed to solve 10

  Can capital markets be expected to solve these problems? 12

  Non-linearities and risks associated with market-based financing 18

  What drives capital market development? 21

4 Structural shifts in global capital markets 24

  The expansion of private markets 24

  Concentration in public capital markets 26

5 Conclusion 31

References 32

Annex A. The geography of today’s capital markets 39

Annex B. Data and methodology 44