In 1976 most of the world was governed by undemocratic regimes. These regimes came in many different types: some were controlled by Communist parties and others by right-wing military officers loyal to the United States. There were dictatorships ruled by nationalist leaders, strongmen who unseated independence leaders, and by members of families that owned much of a nation’s resources. Some of these dictators created an illusion of governing democratically, but they restricted opposition or required one-party rule.

Some dictatorships created the space to engage in utopian projects to remake nations. Even when such dictatorships succeeded in their goals, they did so at enormous costs measured in debt and inflation, famine and malnutrition, the tattering of public institutions, and the reliance on repression to maintain order.

By the mid-1980s dictatorships around the world had begun to fall, and democratic transitions followed. During the 1980s most of Latin America returned to democracy, and in 1989 the fall of the Berlin Wall began a wave of political and economic change in the Soviet Union and eastern Europe. The end of the Cold War division of Europe accelerated a process of integration and unification that had its roots in reconstruction after the Second World War and the process of decolonization that dismantled European empires. Alongside political transitions, a wave of economic liberalization, often promoted by the United States, swept the world. Trade and economic activity increased as a result of liberalization, but it also created growing gaps between rich and poor.