SAN FRANCISCO, March 17, 2021 /PRNewswire/ -- Democracy Investments, a new company focused on promoting democracy by influencing capital flows in financial markets, has entered an exclusive global license agreement with the publisher of “The Economist,” The Economist Group, LTD, for the use of their Democracy Index.
Julie Cane, Democracy Investments CEO, proposed the licensing arrangement to The Economist Group when she and her team envisioned the long-term impact the partnership could have. According to Julie, “Democracy has been in decline globally in recent years. Our goal is to reverse this trend and heighten awareness about the dangers of passive investment in authoritarian countries. This agreement will enable Democracy Investments to provide a new international equity index re-weighted toward democracies and away from authoritarian states.”
According to Joan Hoey, Economist Editor, “The Democracy Index, produced annually by The Economist Intelligence Unit, is a robust, independent measure of the state of democracy globally. Our index provides a comprehensive picture of trends in democracy across 167 countries, allowing comparisons across countries and between time periods since the start of the index in 2006. Despite the global ‘democracy recession’ of recent years, 68 countries have improved their scores over the lifetime of the index. This shows that democratic progress is possible even when the overall global trend is one of decline.” The 2020 Democracy Index winners and losers can be downloaded here.
Julie and her team believe the Economist’s Democracy Index is the most objective and transparent measure of democracy in existence. A country’s democracy score can range from 0-10 and is a composite of sixty indicators, which are grouped into five categories: electoral process and pluralism, functioning of government, political participation, political culture, and civil liberties.
Chief Economist Richard Rikoski adds, “We are allocating capital based on democracy scores to lessen the cost of capital for democracies and to increase it for authoritarian states. By making investment proportional to democracy scores and never dropping investment in a nation to zero, we hope to maintain a market-based incentive for democratic reforms.”
Today’s announcement comes as Democracy Investments prepares to launch the index-based strategy on March 30, 2021. Stay informed on this and other developments at https://www.democracyinvestments.com/.