The report, entitled "Governance Matters: Governance Indicators for 1996-2004", rated Croatia among the 17 countries that made great progress in democratic development and among the eight countries that made great progress with regard to the rule of law.
The World Bank uses six indicators to measure governance quality: voice and accountability (which measures political, civil and human rights), political stability and violence, government effectiveness, regulatory quality (which measures the incidence of market-unfriendly policies), rule of law and control of corruption.
The report says that reformers in many governments, civil society and investors increasingly view governance as key for development and the investment climate.
The report covers 209 countries and territories with results drawn from 37 separate data sources provided by 30 respectable institutions such as the Institute for Management and Development, the World Economic Forum, the European Bank for Reconstruction and Development, Gallup, the Heritage Foundation, Reporters Without Borders and Price-WaterhouseCoopers.
Estimates of each of the six indicators range from 2.5 to -2.5 with a mean of zero.
The report shows that the indicator of democracy and accountability of governance in Croatia increased from -0.50 in 1996 to 0.46 in 2004. With respect to the rule of law, Croatia scored 0.07 in 2004 as against -0.53 in 1996.
The political stability indicator showed improvement from 0.24 in 1996 to 0.35 in 2004, while the government effectiveness indicator went up from -0.17 in 1995 to 0.32 in 2004.
As regards corruption control, Croatia improved from -0.48 in 1996 to 0.08 in 2004, while regulatory quality increased from -0.08 in 1996 to 0.19 in 2004.
In all these dimensions of the quality of governance, Croatia ranked better than half the countries in the world. With regard to the voice and accountability measure, it scored better than 60.2 per cent of other countries, and with regard to the rule of law, it was rated better than 55.6 countries.
The report shows that the quality of governance stagnated globally during the reported period, because despite the fact that a number of countries made significant progress many countries experienced little change.