From Project Syndicate by Dani Rodrik:
By many measures, the world has never been more democratic. Virtually every government at least pays lip service to democracy and human rights. Though elections may not be free and fair, massive electoral manipulation is rare and the days when only males, whites, or the rich could vote are long gone. Freedom House’s global surveys show a steady increase from the 1970s in the share of countries that are “free” – a trend that the late Harvard political scientist Samuel Huntington dubbed the “third wave” of democratization.
The dissemination of democratic norms from the advanced countries of the West to the rest of the world has been perhaps the most significant benefit of globalization. Yet not all is well with democracy. Today’s democratic governments perform poorly, and their future remains very much in doubt.
In the advanced countries, dissatisfaction with government stems from its inability to deliver effective economic policies for growth and inclusion. In the newer democracies of the developing world, failure to safeguard civil liberties and political freedom is an additional source of discontent.
A true democracy, one that combines majority rule with respect for minority rights, requires two sets of institutions. First, institutions of representation, such as political parties, parliaments, and electoral systems, are needed to elicit popular preferences and turn them into policy action. Second, democracy requires institutions of restraint, such as an independent judiciary and media, to uphold fundamental rights like freedom of speech and prevent governments from abusing their power. Representation without restraint – elections without the rule of law – is a recipe for the tyranny of the majority.
Democracy in this sense – what many call “liberal democracy” – flourished only after the emergence of the nation-state and the popular upheaval and mobilization produced by the Industrial Revolution. So it should come as no surprise that the crisis of liberal democracy that many of its oldest practitioners currently are experiencing is a reflection of the stress under which the nation-state finds itself.
The attack on the nation-state comes from above and below. Economic globalization has blunted the instruments of national economic policy and weakened the traditional mechanisms of transfers and redistribution that strengthened social inclusion. Moreover, policymakers often hide behind (real or imagined) competitive pressures emanating from the global economy to justify their lack of responsiveness to popular demands, and cite the same pressures when implementing unpopular policies such as fiscal austerity.