ABSTRACT
Introduction Given that North’s framework for institutional change, as discussed above, is a meta-theory, it is important that we look at how this framework would be implemented at a practical level and, in our case, through institutional and legal reform in order to orchestrate capital market development in developing market economies, such as those in Africa. Any such reform process would involve changes of both government policies and legal rules. In this chapter, therefore, we shall look at different policy options that may form and inform any such reform agenda within the tenets of North’s framework. North emphasises the importance of specific institutional and social histories. Economic actors behave according to belief systems that have been formed by past experience. These belief systems are perpetuated by informal institutions. What we need is an analysis and methodology for taking these factors into account. North tells us why we cannot ignore the institutional structures, but is weaker on how we take them into account. Discussed below are some suggested methodologies that may be employed by policy makers in their bid to reform capital market institutional structures in their respective countries and/or economic regions.
