There is a general agreement among financial specialists that for the economy of any country to grow smoothly, there has to be proper management of capital markets as well as banking systems. There are numerous advantages that can be drawn from properly functioning capital markets, and this is something that can be attested to by the improved economies of many countries in recent times. Examples of such countries include England, United States, Japan and Netherlands. This probably explains why finance experts have shown a sudden interest in researching about this sensitive topic of financial development. For financial development to be successful in any country, a lot of factors have to be considered and treated with the importance they deserve. Most of those factors are political economy factors like industrial and financial incumbents. The role of financial and trade openness can also not be underscored, especially when it comes to looking at mechanisms that impact the inducements of incumbents.
For any political economy structure to be regarded as strong and vibrant, there has to be a delicate relationship of political and economic powers. This is what sets the stage for economic institutions to be successful. Financial experts also advise about having stable political and economic environments because this is what comes in handy in simplifying economic growth in most countries.