Democracy and economy – The daily blog of behavioral and cognitive economics

Where Democracy and Free Markets Correlate

Two years ago, we said that democracy and a market need each other. Now, comparing The Economist’s Democracy Index and the Index of Economic Freedom, again, we see pretty much of a correlation. Three of the top four free market economies are full democracies but not Singapore: Democracy and markets. As in the past, The Economist’s EIU April 2026 “Democracy Index” for 2025 places nations–this year at 167– in four buckets. Below, the dark and medium blue indicate “full democracies” while the lighter blue identifies the “flawed democracies.” Then, moving to the left on the scale, the regimes are grouped as “hybrid” and “authoritarian”. ….[READ]