The last decade has seen three serious blows to democracy’s credibility.
The first is the accumulation of public and private debt beyond what is prudent. (I include private debt because people or banks may avoid their debts by transferring them to the state, demanding their cancellation by political means, or by voting for parties that inflate the debt away.) This accumulation of debt made it much harder for European nations to respond to the financial crisis by Keynesian spending. You are supposed to save in the good times so that you can spend in the bad times. We spent all the time and when we really needed to spend, we stretched our credit with the markets. Now most European democracies have to perform a very unpleasant balancing act.
The second and much more serious is the violation of human rights by the Western democracies. We were not supposed to torture people, abduct people to be tortured by others, or imprison (“detain”) people for 3 months without trial. George W. Bush authorized torture and was reelected. Since then, nobody has been prosecuted for the torture that took place. The word for this in third-world dictatorships is "impunity". It is hard not to suspect that these events happened because very many Americans do not mind, or actively support, torturing America’s enemies. (Similar things have happened in Britain.) So, the democratic process failed to protect unpopular minorities. This is tyranny of the majority. When democracy eats away at liberalism, it is destroying its own moral basis.
Last, and potentially the most serious, there is the failure to deal with global warming. This issue dwarfs all others in its possible consequences. Again, one factor behind the world’s inability to come up with a solution is surely that in many democratic countries, large parts of the public do not understand the science of climate change, or are actively deluded climate deniers. It is as if human survival depended on the theory of evolution, in a world of creationists.
Dictatorship hardly has a better record in any of these cases. The Chinese also share the blame for Kyoto's failure, plenty of dictators have piled up debt and run down the country, and as for human rights, enough said. But if the failures above become more and more apparent, nobody will be calling for a home-grown Idi Amin. Instead more and more power will be handed over to unelected bureaucrats, with academics and others thinking up specious reasons why this is “really compatible with the principles of democracy” – just not with actual voting, you understand.
For these reasons, despite the inspiring example of the Arab spring, I am not sanguine about democracy's future in its heartlands.