Can Democracy Still Make A Place Richer?

(MENAFN- Swissinfo) For decades, the promise of prosperity was a key argument for pushing democracy around the world. More recently, the narrative has been on the back foot – despite apparent success stories like Switzerland. This content was published on August 26, 2025 - 09:00 10 minutes

As part of the democracy team, I report on the dynamic relationship between citizens and their institutions in Switzerland and abroad. Born in Ireland, I have a BA in European Studies and MA in International Relations. I've been at SWI swissinfo since 2017.

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I write original and in-depth data-driven articles using my skills in data analysis and visualisation. I cover a wide array of topics, among which are Switzerland's place in global trade, climate change and demographics. Born and raised in France, I studied international relations in Lyon, then graduated from Lille journalism school in 2011. I have been living in Switzerland since 2012 and worked at RTS for eight years before joining SWI swissinfo in 2020.

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During a visit to Uzbekistan in June, Slovak Prime Minister Robert Fico seemed won over by the economic dynamism of his hosts.“More and more I wonder if Europe should consider reforming our political system, based on free democratic elections, in order to remain competitive,” Fico said. For him, places like Uzbekistan, China or Vietnam are simply more decisive.“When you have a government of four political parties, you can't compete”.

Can't you? With a few oil-rich exceptions, the world's wealthiest countries still tend to be freer (see chart). Switzerland, as a very rich, competitive, and democratic place, even looks like a poster child for the link (the country also happens to be run by a four-party coalition ). Yet in recent years, as China has boomed and economic discontent has spread in many Western states, the belief in democracy as a sure path to prosperity has soured – and not just for Fico.

External Content An old story

Historically, the idea of a connection between democratisation and wealth in the first place was largely a product of the post-Second World War era.

On the one hand, it was part of the global battle for influence, as a cornerstone of the model of capitalist prosperity that the US-led West held up against Soviet communism. But it also became a topic of academic research.“The more well-to-do a nation, the greater the chances it will sustain democracy,” US political scientist Seymour Martin Lipset famously wroteExternal link in 1959, in a foundational statement of what became known as“modernisation theory” – the idea that as societies develop, their politics naturally become more liberal and democratic.

The theory, and the politics behind it, wasn't without its critics. Lipset himself acknowledged that there are so many factors – education, urbanisation, natural resources – playing into development that it's too simple to just look at GDP and democracy. Others attacked it for being loaded with assumptions about what the 'ideal' society should look like. Is the end-point of human development inevitably Western, liberal and consumer-capitalist? And what should come first: economic modernisation or political reform?

'Democracy delivers'

Yet despite disagreements, the notion that development and democracy go hand in hand lasted. In 2023, Foreign Affairs magazine labelled itExternal link“the greatest claim to being a genuine Washington consensus”; the previous year, the US Biden administration had launched Democracy Delivers, a foreign aid project designed to show that democracy doesn't just bring abstract freedoms, but also material gains.

More recent studies also haven't signed off on the link completely. But there are often caveats. In 2019, researchers including the 2024 Nobel Economics laureate Daron Acemoglu found thatExternal link moving from autocracy to democracy boosts GDP by 20% over a 25-year-period. However, their data stops in 2010; the 15 years since then haven't been kind to democracy globally. The study also doesn't say why countries switch systems in the first place. Acemoglu has saidExternal link there is“no mechanism” to suggest that countries like China will democratise as they become richer. And recently, he has shifted his focus to how culture and institutions – rather than democracy as such – impact growth.

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Building on Acemoglu, a February 2025 paperExternal link confirmed that a link between democracy and income historically exists, but is not linear. In poorer countries, according to the study, initial income boosts often come with a dip in freedoms, while it's only once a certain threshold of prosperity is reached that their democracy starts to improve.

Why is this the case? One of the paper's co-authors, Petros Sekeris from the TBS business school in Toulouse, thinks the wealthier people become, the more willing they are to“work less and spend more time in the street, online, or in groups, pressuring the government and helping the country democratise”. But causation is hard to pin down. The model stands up with economic data, Sekeris explains, but he doesn't have hard facts about what precisely sparks citizens to push for democracy – or not. For example, the rise of new media has obvious impacts on democracy, he says, but it's not captured in the data.

It's not (just) the economy!

This points to a key downside in such statistical analyses of democracy and GDP: they can't always account for other historical shifts, whether it's TikTok, climate change, immigration – or figures like Donald Trump. Famously, the current US president doesn't tend to follow conventional logic; neither does he distinguish greatly between democracies and non-democracies. His tariffs, for example, didn't just stump economists – they also hit democracies like Switzerland, Canada, India, and Brazil particularly hard.

Some researchers have thus been cautioning against over-emphasising material factors in explaining political change. For example, economic dissatisfaction is often blamed for the“backsliding” of democracy in recent years. But data doesn't always support this. As Thomas Carothers and Brendan Hartnett write in the Journal of DemocracyExternal link , sometimes individual politicians, like Trump, consciously decide to take their country down a certain path. In the end, they say,“leaders still matter”.

>> Read more about how leaders – and their characters – can influence democracy and polarisation:

More More Democracy Political characters: 'A dark personality has become an electoral asset'

This content was published on Jun 15, 2025 Leaders showing signs of narcissism or ruthlessness tend to be backed by voters with more polarised views, according to researchers.

Read more: Political characters: 'A dark personality has become an electoral asset

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