Democracy Drives Prosperity
Director of DPIR’s Centre for Democratic Resilience, Petra Schleiter, authors new EU Commission study reporting strong evidence that democratic governance plays a crucial role in driving long-term prosperity, innovation, competitiveness, and resilience.
Drawing on extensive research, it highlights several well-established ways in which democracy supports economic success. Democratic systems help build and sustain high-quality economic institutions that protect property rights, enforce contracts, and uphold the rule of law—key foundations for thriving markets.
Democracy creates a stable and predictable business environment, encouraging competition and fostering innovation by constraining arbitrary policymaking, corruption, and politically connected rent-seeking. These conditions also make democratic countries more attractive to foreign investors, particularly those from other democratic nations, reinforcing growth.
Overall, the report presents a clear “business case for democracy” and shows how businesses engage individually and collectively to support open societies, open markets, and democratic governance. As employers, investors, and influential local, national, and international actors, firms shape public life through their organisational culture, investments, advocacy, standards, networks, and political conduct, with important consequences for transparency, accountability, civic participation, and the rule of law.
The report highlights the central role of businesses in Europe’s democratic future. Companies, it shows, are not just beneficiaries of stable and prosperous democratic systems—they are powerful actors capable of shaping them.
