The report finds that Croatia, as a new state, is burdened with demands, not least of which is the need for a sound regional development policy, due to the extreme regional disparities. With the post-war reconstruction completed, there arises a need for a uniform, co-coordinated development of Croatia as a whole. After an overview of trends in human development observed since the war, the report turns to the regions, bi-cameralism and policy formation, sub-national financing and local self-government. Included is a case study on the problem of development among Croatian islanders, where it is shown that a regional development policy is emerging, as evidenced by the National Island Development Programme and the Island Act. However, the authors conclude that the human development potential of the regional diversity has yet to be fully recognized and requires special development care in the future.