Institutionalized democracy
Democracy is conceived as three essential, interdependent elements. One is the presence of institutions and procedures through which citizens can express effective preferences about alternative policies and leaders. Second is the existence of institutionalized constraints on the exercise of power by the executive. Third is the guarantee of civil liberties to all citizens in their daily lives and in acts of political participation. Other aspects of plural democracy, such as the rule of law, systems of checks and balances, freedom of the press, and so on are means to, or specific manifestations of, these general principles. We do not include coded data on civil liberties. 
The Democracy indicator is an additive eleven-point scale (0-10). 
This "institutional democracy" indicator follows a logic similar to that underlying the Polity I analyses. There is no "necessary condition" for characterizing a political system as democratic, rather democracy is treated as a variable.  If the composite indicator of institutionalized democracy is inappropriate for some conceptual purposes, it can be easily redefined either by altering the constituent categories and weights, or by specifying some minimum preconditions. A mature and internally coherent democracy, for example, might be operationally defined as one in which (a) political participation is unrestricted, open, and fully competitive; (b) executive recruitment is elective, and (c) constraints on the chief executive are substantial. The Polity IV dataset covers all major, independent states in the global system (i.e., states with total population of 500,000 or more in the most recent year; currently 163 countries) over the period 1800-2009.  Changes made during the most recent update are listed in an Excel file in http://www.systemicpeace.org/inscr/inscr.htm. For details see Monty G. Marshall, Ted Robert Gurr and Keith Jaggers “POLITY™ IV PROJECT, Political Regime Characteristics and Transitions, 1800-2009, Dataset Users’ Manual”
Institutionalized Democracy: Democracy is conceived as three essential, interdependent elements.
One is the presence of institutions and procedures through which citizens can express effective
preferences about alternative policies and leaders. Second is the existence of institutionalized
constraints on the exercise of power by the executive. Third is the guarantee of civil liberties to all
citizens in their daily lives and in acts of political participation. Other aspects of plural democracy,
such as the rule of law, systems of checks and balances, freedom of the press, and so on are
means to, or specific manifestations of, these general principles. We do not include coded data on
civil liberties.  The Democracy indicator is an additive eleven-point scale (0-10).