On a scale of 1 to 7 (with 1 being the most free and 7 the least free) Latvia rates a 'Democracy Score' of 2.07 according to the 2014 edition of the report, the 18th such report produced by Freedom House.
That score puts it behind northern neighbor Estonia (1.96) and top-ranked Slovenia (1.93) but ahead of Lithuania (2.36), Poland (2.18), the Czech Republic (2.25) and all other former communist states.
Latvia scored particularly well for its electoral processes, civil society and judicial framework but a warning note was sounded on corruption and independent media which was seen to decline.
"Media ownership is becoming increasingly concentrated in Latvia, raising concerns about the sector's ability to act as an effective watchdog," Freedom House said, citing the case of a regional journalist placed under police pressure to reveal sources.
The average score of the 29 former communist states surveyed was 4.35 with Russia ranked 6.29 and Belarus 6.71.
Brutal dictatorships Turkmenistan and Uzbekistan were judged the least free, both ranking an appalling 6.93.
Of the 29 countries assessed in 2013 and which formed the basis of the 2014 report, 13 were rated as democracies, 6 as transitional regimes, and 10 as authoritarian regimes.
Identifying the key findings, Freedom House said: "Russia’s negative influence on the governance practices of its neighbors became more pronounced in 2013, as replicas of Russian laws restricting “homosexual propaganda” and foreign funding of NGOs appeared in several Eurasian countries."
"The current crisis in Ukraine has focused the world's attention on the sharp ideological divide between Europe, which operates on democratic principles, and Eurasia where nearly 4 out of 5 people live under authoritarian regimes," the report said.