I dont see why anyone would switch to democracy themself anyway. This will only result in a civil war and is very hard for countries like germany and the soviet union for example, since they have alot of protection against ideology drift. The only case where i see it actually being considered is when you want to play with a friend that happens to be democratic and dont want to be the aggressors.
Anyway, democracies have their benefits just as fascism and communsim does. First of all you get a big bonus to relations with other democratic nations, which happens to be most of the countries back then. Fascism and Communism clearly is in the minority here. Then you get the option for free market, which you probably dont really want to use as a fascist or communist country. As democrats cant fully mobilize and War Economy has harsh requirements for Democratic nations and cant close their economy entirely as fascists and commies can. This will result in research bonuses, faster industrial growth time and of course more civilian factories to built even more factories. A massive bonus you have as a democratic nation straight away are obivously the USA, UK and (if they still exist) France, which have alot of resources to share and dont like seeing democratic nations being attacked, i.e granting protection.
They obviously cant be the war mongers fascists or communists can be, even tho some of the major countries get focuses that allow them to declare war on other democracies which they otherwise cant, like the UK invading democratic Norway for example, this is not really something you will see too often. You can basicly see it (GAME WISE) as democracies basicly being the world police that play the "nice guys", while the communists want to puppet and bring communist to everyone and the fascists wanting to build their empires with a closed, self sufficient economy.
