One provides service to the outside world broadly in trade to fulfill its needs, the other provides limited service to the outside world and trades with a highly limited subset of the world to fulfill its needs

Oh you. You nailed it. That's the core difference. /s

I mean there is also a big difference in the way people live in India and Switzerland, and both are democratic countries. Your examples are the result of economic disparity, not political systems.

But if you compare India to China, one democratic and one not, suddenly it's not super clear which countries' citizens have "better" lives.

There are eons of differences between different democracies. Russia is also a democracy on paper, yet it is absolutely unfathomable for someone to “shot themselves in the back of the head and jump out the window” in, say, Switzerland, while many political opponents, journalists “committed suicide” that way in Russia.