Liberal democracies have three core components:

• A democratic system of government (in which leaders are freely and fairly elected by the people)
• Protections for individual rights and liberties (such as freedoms of speech, religion, political association, etc.)
• A strict adherence to the rule of law (the exercise of political power is limited by established laws)

In a word, liberal democracies are characterized by the decentralization of power. Executive power is limited by checks and balances, separation of powers/federalism, or some combination of these and other institutional mechanisms. Power is further limited by free and fair elections as citizens can vote out leaders they no longer approve of. Independent judiciaries also serve as bulwarks limiting government infringement on individual rights.

Commonly cited examples of liberal democracies include the United States, Germany, Sweden, Japan, and New Zealand.