The most recent edition of Freedom House’s Freedom in the World noted a “disturbing decline in global freedom in 2014.” A driver of this appears to have been not necessarily a shift to totalitarian dictatorships, but a more relative illiberalization of democracies. For example, in one NBER working paper, Sergei Guriev and Daniel Treisman note that:
“in recent decades, a less carnivorous form of authoritarian government has emerged, one better adapted to the globalized media and sophisticated technologies of the 21st Century. From the Peru of Alberto Fujimori to the Hungary of Viktor Orban, illiberal regimes have managed to consolidate power without isolating their countries from the world economy or resorting to mass killings.”
Economists Dani Rodrik and Sharun Mukhand further point out the relative scarceness of liberal democracies around the world. In November 2014, Joseph Stiglitz told an audience at the Central European University that “[t]he conscious development of a learning society, essential for shared prosperity, can only be achieved in a liberal democracy”.
So what is a liberal democracy? The answer to that question is could probably fill a bookshelf by itself. The simplest definition, as given by Wikipedia is the following:
“Liberal democracy is a form of government in which representative democracy operates under the principles of liberalism, i.e. protecting the rights of the individual, which are generally enshrined in law.”
Rodrik and Mukhand tie this a bit more to matters conducive to economic development:
“Liberal democracy rests on three distinct sets of rights: property rights, political rights, and civil rights. The first set of rights protects owners and investors from expropriation. The second ensures that groups that win electoral contests can assume power and choose policies to their liking – provided these policies do not violate the other two sets of rights. Finally, civil rights guarantee equal treatment before the law and equal access to public services such as education.”
These sound like fairly straightforward definitions, but when it comes to measurement, it quickly becomes complicated. Freedom House, for example, explicitly calculates values for “political rights” and “civil rights” for all individual countries each year, yet these are also measures used for “democracy”, not just “liberal democracy”. So is more “democracy” the same as more “liberal democracy”? (Also, for measures of “expropriation” from other sources it is not always clear if it’s from the perspective of a foreign investor or a domestic one.)