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In Nations in Transit 2006, Freedom House provides separate ratings for Serbia, Montenegro, and Kosovo in order to provide a clearer picture of processes and conditions in the three different administrative areas. Doing so does not indicate a position on the part of Freedom House regarding the territorial integrity of the State Union of Serbia and Montenegro; neither does it indicate a position on Kosovo's future status. As this edition goes to print, Montenegro declared independence and the State Union was dissolved. The decision to keep Serbia and Montenegro together in this 2006 edition was based on country status as of the end of 2005, the year in study.

The ratings are based on a scale of 1 to 7, with 1 representing the highest level of democratic progress and 7 the lowest. The 2006 ratings reflect the period January 1 through December 31, 2005.

The Democracy Score (DS) is an average of ratings for Electoral Process (EP); Civil Society (CS); Independent Media (IM); National Democratic Governance (NGOV); Local Democratic Governance (LGOV); Judicial Framework and Independence (JFI); and Corruption (CO).

Starting with the 2005 edition, Freedom House introduced separate analysis and ratings for national democratic governance and local democratic governance to provide readers with more detailed and nuanced analysis of these two important subjects. Before 2005, the study used a single governance category.

The ratings category of Judicial Framework and Independence was called Constitutional, Legislative, & Judicial Framework in editions before 2005.

The Nations in Transit 2006 study is an updated edition of surveys published in 2005, 2004, 2003, 2002, 2001, 2000, 1998, 1997, and 1995.