We take the eight core elements of capitalism from our Global Capitalism Index. The seven core elements of Democracy are inspired by V-Dem, the leading research institute on democracy.
8 Core Elements of Capitalism
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Capital Market Sophistication
People and businesses can access and use financial markets to save, borrow, and invest money.
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Development of a Banking System
There is a banking system that provides reliable and accessible financial services to people and businesses.
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Labor Market Openness
It is easy for people to work, find work, and leave their work without huge consequences. Likewise, businesses can easily hire, pay, and fire employees.
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Market Competitiveness
The market is not dominated by one company or individual — it is free and competitive.
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Market-Supporting Policy
Governments pass policies that help the markets exist freely and transparently.
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New Business Formation
People can start and grow new businesses that create new products, services, and jobs.
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Property Rights & Private Ownership
There are opportunities and protections for private companies — the state does not own everything.
7 Core Elements of Democracy
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Consensual
The majority includes the political minorities; there is value in including diverse perspectives.
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Deliberative
People can discuss ideas openly and make decisions based on careful consideration rather than fear or emotional reactions.
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Egalitarian
Everyone is able to participate in politics regardless of background, without being limited by significant inequalities.
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Electoral
Citizens can choose their representatives through regular, competitive elections.
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Liberal
It protects individual, minority, and majority rights by limiting government power.
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Majoritarian
The majority of people can rule and make their values heard through policy.
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Participatory
Citizens can participate in all political processes.