Democracy Tracks Economic Freedom

Using Fraser’s Economic Freedom Index and V‑Dem’s liberal democracy measure, the paper finds a strong global correlation: almost all highly democratic countries are economically free, and vice versa. A post–Berlin Wall ‘natural experiment’ shows democratization is followed by sustained gains in economic freedom; authoritarian spurts are rarer and less durable. — This challenges both 'capitalism kills democracy' and 'democracy kills capitalism' narratives, pushing policy toward strengthening liberal institutions rather than choosing between market and ballot.