How are capitalism and democracy related? Does capitalist development today generate pressures for democratization in the same way it did earlier in the core countries of capitalism? Past research has come to divergent conclusions on these questions. Cross-national statistical research has found that capitalist development and democracy are consistently correlated. By contrast, comparative historical studies have argued that economic development and democracy was and is compatible with a variety of political forms, and that in some cases economic development imperatives have led to the authoritarian eclipse of political competition, and that the chances of democracy in developing countries are rather poor. The authors of this work provide a comprehensive analysis of the structural conditions of democracy. They review existing research and offer a new theoretical framework for resolving current controversies in the study of democracy. They conclude with reflections on the prospects of democracy in Latin America and Eastern Europe.