"There has been some interesting course discussion around whether the U.S. is "the best democracy," and much wider discussion about the extent to which different countries are democracies, or good democracies. There are various indexes that try to measure this, and each has its own problems and drawbacks. For several years now (dating back to 2006), The Economist magazine has made an intelligent and creative effort to measure the extent of democracy in most of the countries of the world.
While I have some quibbles with its methodology, the Economist Intelligence Unit's annual "Democracy Index" does have the virtues of being objective, empirical, transparent, and multidimensional. The dimensions it seeks to examine with available data and also independent expert codings are:
1) Electoral process and pluralism
2) Functioning of government (incl. government accountability and control of corruption)
3) Political participation
4) Democratic political culture (where survey data is available)
5) Civil liberties
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