Emerging government securities markets (emerging GSMs) are paradoxically trapped in a market failure – the market system is unable to develop the core financial market to support itself. Government intervention is a solution. In emerging GSMs, unlike advanced ones, wherein the government plays a minimal role at the present time, the government is required to set up a market structure that provides fully or heavily subsidized "utilities" to facilitate trading. This study examines the role of "utilities" with a multiplicative factor model and found that diminishing returns to "utilities" explained the development dynamics of emerging GSMs.