The lower house had been elected in 1992 and its representatives had passed laws creating new territorial organisations of Croatia.

[2] The electoral law made each county a district that was to elect three representatives on the basis of proportional representation.

In practice, the use of proportional representation in such small districts led to a single party – the Croatian Democratic Union – being grossly overrepresented because sometimes even with less than third of the votes guaranteed two of the three seats.

The elections were marked by an uncharacteristically intense campaign directed towards single region – Istria.

The government of Franjo Tuđman has invested great effort to defeat the Istrian Democratic Assembly (IDS) after being concerned by the party's good result during the 1992 elections.