Across the planet, from Europe to Africa, as well as Asia, Australasia, both Americas and the Middle East, the share of individuals who say they are "dissatisfied" with democracy has jumped significantly since the mid-1990s - from 47.9 per cent to 57.5 per cent, according to the report.
Dissatisfaction with democratic politics among citizens of developed countries has increased from a third to half of all individuals over the last quarter of a century, it added.
For the study, the research team from the university's new Centre for the Future of Democracy used a unique dataset of more than four million people. It combines over 25 international survey projects covering 154 countries between 1995 and 2020.
"Across the globe, democracy is in a state of malaise," said the report's lead author Roberto Foa, from Cambridge's Department of Politics and International Studies (POLIS).
"We find that dissatisfaction with democracy has risen over time, and is reaching an all-time global high, in particular in developed countries," Foa added.
The research revealed that the downward trend in satisfaction with democracy has been especially sharp since 2005, which marks the beginning of what some have called a "global democratic recession".
Just 38.7 per cent of citizens were dissatisfied in that year, but this has since risen by almost one-fifth of the population to 57.5 per cent.
Many large democracies are now at their highest-ever recorded level for democratic dissatisfaction. These include the UK, Australia, Brazil, Mexico, as well as the US - where dissatisfaction has increased by a third since the 1990s.
Other countries that remain close to their all-time dissatisfaction highs include Japan, Spain and Greece.
However, researchers uncovered what they call an "island of contentment" in the heart of Europe: Denmark, Switzerland, Norway and the Netherlands are among nations where satisfaction with democracy is reaching all-time highs.
"We found a select group of nations, containing just two per cent of the world's democratic citizenry, in which less than a quarter of the public express discontent with their political system," said Foa.
Other regional "bright spots", where levels of civic contentment are significantly higher, include Southeast Asia, and to a lesser extent the democracies in South Asia and Northeast Asia.
"For now, much of Asia has avoided the crisis of democratic faith affecting other parts of the world," said Foa.
The research team found that shifts in democratic satisfaction often responded to "objective circumstances and events" such as economic shocks or corruption scandals.
"The 2015 refugee crisis and the 2008 financial crisis had an immediately observable effect upon average levels of civic dissatisfaction," said Foa.
Following the onset of the global financial crisis in October 2008, for example, global dissatisfaction with the functioning of democracy jumped by around 6.5 percentage points - an increase that "appears to have been durable", said the researchers.
( With inputs from IANS )