The idea of democratic indices came from the academic community. Social scientists are testing the relationship between democracy and various political and economic outcomes. Some studies said that democracies are less likely to fight each other and the spread of democracy makes the world safer.
Numerous quantitative studies have found a positive relationship between democracy and economic development. Industrialization, urbanization, wealth, and education uder economic development are so closely with political correlate of democracy. The question is how to operationalize this concept.
Democracy is a complex social and political phenomenon. Abraham Lincoln said,“Democracy is a government of the people, by the people, and for the people.”
The individual in an economy need a secure government that respects individual rights. The individuals need their property and their contract rights protected from violation not only by other individuals in the private sector but also by the government as thye entity who has the greater power in the society.
An economy will be able to reap all potential gains from investment and from long-term transaction only if it has a government that is believed to be both strong enough to last and inhibited from violating indiividual rights to property and rights to contract enforcement. And it can be reached in a lasting democracy.
The elections, competitiveness, and accountability do not make democracy complete. It is impossible to imagine modern democracy without such vital elements as political pluralism, human rights, civil liberties, a virgorous civil society and a political culture of tolerance, cooperation, and compromise.
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