Objective Despite a plethora of studies on the relationship between democracy and economic development, a dominant theoretical framework has yet to emerge. Economic development may lead to the transition to democracy and mature democratic institutions are likely to help economic development. Thus, in this article, we test the relationship among economic development, institutional maturity, and democracy. Methods In a recent study, Gerring et al. (2005) developed a new concept, “democracy stock,” to incorporate institutional maturity. This concept is useful because institutional maturity matters. To address the issue of endogeneity between democracy and economic development, we investigate the relationship using a simultaneous equation method and data from 1950 to 2000. Results The empirical results show that democracy and economic development affect each other. Conclusions Economic development not only helps democratization, but it also assists democratic systems to survive and mature. Mature democratic systems do help economic development.