It takes data from numerous sources over a variety of civil rights measures and areas measuring how well-run each country is and then colour codes each country based on its overall score.
Obviously I can't vouch as to the accuracy or reliability of the scores, but it seems quite a useful tool. The only downside is that it only goes up to 2006.
UPDATE: I've been told that the WFA is close to the US govt, due to its use of Freedom House data, which may impinge on its accuracy... I've been told that the Global Peace Index is more reliable. Of course, the same caveats apply regarding its reliability. Thanks to 10% for the info. Tweet