The richest countries today are, with very few exceptions, liberal democracies. They are liberal in the sense that their citizens possess rights that guarantee them the freedom to go and do as they wish. They are democracies in that their citizens exercise significant control over the state. In the poorest countries, one or both attributes of liberal democracy are often missing.

With the collapse of communism in Eastern Europe in 1989 and in the Soviet Union two years later, it appeared that capitalism and liberal democracy had triumphed over planned economies and dictatorial governments. The speed with which the former communist countries adopted market and democratic institutions suggested that their citizens believed that these institutions were best suited for meeting their needs and improving their welfare. As poor countries develop, they too could be expected to become liberal democracies.