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There are a lot of indicators they look at, give it a read if you're curious: https://image.b.economist.com/lib/fe8d13727c61047f7c/m/1/609... (North America starts at page 44). One snippet:

> However, the political and structural problems that caused the US to be downgraded to a “flawed democracy” in 2016 (a downgrade that pre-dated the inauguration of Donald Trump as president in January 2017) persist. These include low levels of trust in political institutions and the media; institutional gridlock; excessive influence of lobbyists, interest groups and the mega-rich; sharp economic and social inequalities; and an absence of social consensus on core national values.




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