The guest bloggers at Peking Duck point to an excellent IHT editorial which offers thoughts on why free economies have not led to free elections in many authoritarian countries:

Economic growth has traditionally been thought to promote democratization by making strategic coordination easier, as communications technology improves, news media become more diverse and the citizenry more educated. But in recent years some savvy regimes have learned how to cut the cord between growth and strategic coordination, allowing the former without having to worry about the latter.

Governmental control of communications means that dissidents cannot organize, which mean no color revolution. The article suggests linking the improvement of civil liberties to economic incentives as a possible solution, which does not seem that useful to me. It seems that most authoritarian states realize that even if the United States is unwilling to help them without democratization, other states (France, Russia, China, etc.) have no such qualms.

It seems to me that another valid avenue to promote democracy is to make it easier to dissidents to use anonymous encrypted communication methods, which are more difficult for governments to monitor. Tor, an system that allows people to access the Internet through anonymous, encypted tunnels, is having a contest to design a GUI for the program, in order to increase its usability. Ethan Zuckerman wrote about Tor's usefulness for political dissidents back in April.