Democracies Dominate the World Economy

Democracies control the vast majority of the world economy – roughly 70%. The remainder (28%) is controlled by a mix of authoritarian regimes and what the Economist Intelligence Unit calls “hybrid regimes”, meaning they have a mix of authoritarian and democratic features.

According to IMF figures, non-US democracies’ annual economic activity totals over 44 trillion USD, the US over 22 trillion USD, China 16 and a half trillion USD, and the remaining non-democracies just 9 trillion USD.

On a per capita basis, democracies far outperform non-democracies. This effect is especially strong for full democracies. Consider the graph below:

The red dot represents the percentage of the world economy each regime type controls, and the blue dot represents the percentage of the global population they control. Where the red dot is on top, the regime type is economically overperforming, where the blue dot is on top the regime type is underperforming, pound-for-pound, as it were. As you can see, flawed democracies outperform non-democracies and full democracies do so even more dramatically. You can see the data here, or have a look at how I put it together in the research portal at the top of this story.

I think this is important because I feel that democracies are often shown as powerless to affect authoritarian regimes, or even in imminent danger of being overpowered by them. This leads to the perception of a hard choice between confrontation and conflict on one hand, and acquiescence and tacit approval of human rights abuses on the other.

But democracies have significant economic leverage, which could be used to peacefully advance causes like democracy and human rights.

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