The trust of investors in the stock exchange is based on legislation to protect their property rights against the firm's management' against the authorities and against other investors who might wish to rig the market or manipulate the prices of stocks. But legislation without an effective judicial and law enforcement systems is like a stock exchange without money. To enforce property rights in Macedonia takes ages and even then the outcome is not certain. The stock exchange, the banks, the regulatory authorities, the police and the courts have to be above suspicion. For the market to be utterly efficient - it must be utterly free of any ulterior considerations and motives.
Corruption distorts the market's allocative mechanisms and powers.
It is easily discernible in dealings in the stock exchange for all to see. A stock exchange is, after all, the showcase of the local economy. But there is a problem which towers above all other problems and it is almost endemic to Macedonia. It helps to explain much of the predicament of the stock exchange in Skopje. Governments throughout the world use their stock exchanges to sell shares of state-owned enterprises to their populace.