Estonia

   

Policy Performance

#7

Economic Policies

#8
With a strong focus on fiscal discipline, Estonia scores well overall (rank 7) with regard to economic policies. Its score in this area has declined by 0.2 points since 2014.

Crisis-era labor-market reforms have helped boost employment and decrease unemployment, particularly among low-skilled workers. Addressing low wages is a next priority, primarily through tax credits and a rising minimum wage.

A major reform is intended to bring a significant share of the country’s disabled population into employment. However, high social-insurance contributions have raised overall labor costs, weakening the country’s competitiveness.

There is a flat income-tax rate, and companies pay income tax only on non-reinvested profits. Budgetary discipline is strong, with public debt consequently very low. However, pension funds are accumulating debt. R&D expenditures have reached the EU average, but growth has come almost wholly from EU structural funds.

Social Policies

#12
Despite gaps in some areas, Estonia receives high overall rankings (rank 12) with respect to social policies. Its score in this area remains unchanged since 2014.

While educational outcomes are very strong, policymakers are seeking to strengthen links between education and labor-market needs. Child benefits have been increased to address problematic child-poverty rates. Regional income disparities are significant, and working-age people are leaving rural areas at high rates.

The health care system produces good outcomes with limited resources, but coverage is tied to employment or education status, leaving some without free access. Despite low benefit levels, the pension system is not sustainable in its current form.

Parental benefits are generous, and women’s employment rates quite high. A new push to improve integration of the large Russian-speaking population has prioritized civic participation and cultural immersion, and includes Russian-language schools and media and changes to citizenship rules.

Environmental Policies

#7
With a strong record in recent years, Estonia receives high rankings in international comparison (rank 7) with regard to environmental policies. Its score in this area has declined by 0.2 points since 2014.

Environmental awareness rose sharply through the EU accession process. Greenhouse-gas emissions have been halved in 20 years, and the renewable-energy share is significant. However, the country is still dependent on energy-intensive technologies.

Water pollution has decreased, and forest-management practices are effective. The country has signed the Kyoto Protocol and other global agreements, and has implemented related tax and consumption regulations. It is not a leader in shaping international environmental regimes.

Democracy

#9

Quality of Democracy

#9
With transparency and access improving thanks to sophisticated online tools, Estonia receives a high overall ranking (rank 9) in the area of democracy quality. After a slight gain last year, its score in this area is now unchanged since 2014.

Internet voting has become common. While political parties have begun reaching out to Russian-language voters, official documents are still Estonian-only. Campaign-finance transparency rules and oversight powers have been strengthened. Citizen-led petitions can prompt parliamentary consideration of an issue, but only parliament can initiate referendums.

Civil rights are widely respected. Same-sex couples have gained cohabitation rights, and anti-discrimination policies are generally broad, but gender equity remains problematic. Courts are independent, with a transparent judicial-appointment process.

The number of corruption cases has risen sharply in recent years, but heightened awareness may have played a role. While electronic media are very important, media ownership concentration is significant.

Governance

#21

Executive Capacity

#23
With a comparatively weak prime minister, Estonia receives a middling score in international comparison (rank 23) in the area of executive capacity. Its score in this area has declined by 0.2 points relative to 2014.

A new program intended to improve policymaking quality has strengthened the assessment and forecasting role of the Government Office’s Strategy Unit. However, the GO’s substantive policy-evaluation capacity remains modest. Proposals are discussed in the coalition council, with formal and informal interministerial coordination playing an important role.

Though the RIA framework is well developed, practical implementation has been slow. Stakeholders are consulted during policy preparation, but a corporatist tendency giving likely policy supporters precedence is emerging. The current government has acted less coherently than its predecessor.

Local governments rely on state financing, but tasks are badly underfunded. Adaptation to EU norms has been strong.

Executive Accountability

#20
With mixed strengths and weaknesses, Estonia falls into the middle of the pack internationally (rank 20) with regard to executive accountability. Its score in this area has declined by 0.1 points since 2014.

Citizens are avid news consumers, but knowledge regarding detailed policy topics can be thin. While media offer considerable in-depth information, reporting tends to focus on decisions only after they have been made.

Parliamentarians have only modest resources, but strong formal oversight powers. The National Audit Office is independent of the parliament. No ombuds office exists.

Political-party decision-making is centralized. Trade union and employers’ associations are in the midst of expanding analysis and policy-proposal capacities. Other civil-society groups have also shown growing sophistication, and many can today propose plausible concrete policies.
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