Institutional quality and governance indicators are some of the socioeconomic variables that play a pivotal role in the development of the stock market especially in developing countries. This study examines the impact of some selected governance indicators- specifically political stability and government effectiveness on the development of Nigeria’s stock market for the period 1998- 2023. The data used for the study includes market capitalization as dependent variable, and government effectiveness, political stability, interest rate and inflation rate as regressors, which were collected from World Governance indicators and world development indicators 2023. The study employed the application of Unit root analysis as well as the Autoregressive Distributed lag (ARDL) model for regression analysis, as well as post estimation tests like serial correlation LM test, heteroskedasticity test and cumulative sum among others. The results of the analysis revealed that government effectiveness has a positive impact on market capitalization both in the short-run and in the long run, while, political stability has a positive impact on market capitalization in the short run, but negative impact in the long run. The study recommends among others that the Nigerian government should strengthen national institutions and institutional environment so that the quality of governance and government effectiveness will be enhanced, which will promote the development of the stock market in Nigeria.