Estonia

   

Policy Performance

#9

Economic Policies

#10
With a strong focus on fiscal discipline, Estonia scores well overall (rank 10) with regard to economic policies. Its score in this area has declined by 0.3 points since 2014.

Labor-market reforms have helped boost employment and decrease unemployment. However, active labor-market policies have not significantly reduced jobless rates among low-skilled workers. Addressing low wages is a next priority, primarily through tax credits and a rising minimum wage. Critics argue that economic “fine tuning” has not produced sufficient economic growth.

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 and the health-insurance fund have accumulated long-term debt. R&D expenditures are declining, with outcomes comparatively poor.

Social Policies

#13
Despite gaps in some areas, Estonia receives high overall rankings (rank 13) with respect to social policies. Its score in this area remains unchanged relative to 2014.

While educational outcomes are very strong, policymakers are seeking to strengthen links between education and labor-market needs. Education in public institutions is free at all levels. Poverty and inequality rates are high. Increases in child benefits have failed to curb problematic child-poverty rates. Regional income disparities are significant.
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. A number of reforms are underway.

Parental benefits are generous, and women’s employment rates quite high. Along with programs designed to improve integration of the large Russian-speaking population, new programs are aimed at helping refugees and other new immigrants integrate.

Environmental Policies

#8
With a strong record in recent years, Estonia receives high rankings in international comparison (rank 8) with regard to environmental policies. Its score in this area has declined by 0.1 point 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.

By 2020, the country aims to decrease greenhouse gas emissions by nearly 80% compared to the 1990 level.
Water pollution has decreased, and forest-management practices are effective. The country has ratified the Paris climate accord and other global agreements. It is not a leader in shaping international environmental regimes.

Democracy

#8

Quality of Democracy

#8
With transparency and access improving thanks to sophisticated online tools, Estonia receives a high overall ranking (rank 8) in the area of democracy quality. Its score in this area has improved by 0.1 point relative to 2014.

Internet voting has become common. Campaign information is increasingly available in Russian, but official documents are still Estonian-only. While campaign-finance transparency rules and oversight powers have been periodically strengthened, loopholes remain. Citizen petitions can prompt parliamentary consideration of an issue, but only parliament can initiate referendums.

Civil rights are widely respected. Anti-discrimination policies are generally broad. Gender-equity issues remain problematic, but improvement is evident. Courts are independent, with a transparent judicial-appointment process. Lawsuit-resolution times are declining.

The number of registered corruption acts has risen sharply in recent years, but this number is swollen by several cases containing a large number of individual acts. While electronic media are very important, media ownership concentration is significant. Defamation laws and rules requiring journalists to reveal sources under some circumstances have undermined the country’s media-freedom rankings.

Governance

#20

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.

The long-term forecasting capacity of the Government Office’s Strategy Unit is improving. However, the Prime Minister’s Bureau has greater influence on government decisions. The GO’s substantive policy-evaluation capacity remains modest. Proposals are discussed in the coalition council and in cabinet meetings, with formal and informal interministerial coordination playing an important role.

Though the RIA framework is well developed, practical implementation has been very slow. Stakeholders are consulted during policy preparation, but a corporatist tendency giving likely policy supporters precedence is emerging. Ministers in coalition governments sometimes make statements out of sync with the government’s general line.

While the government has made significant progress on its agenda, many critics argue that it has focused on minor changes rather than real reform. A major administrative reform is underway, but remains in its early stages. This will include municipal mergers. Adaptation to EU norms has been strong.

Executive Accountability

#19
With mixed strengths and weaknesses, Estonia falls into the middle of the pack internationally (rank 19) with regard to executive accountability. Its score in this area is unchanged relative to its 2014 level.

Citizens are avid news consumers. Knowledge regarding detailed policy topics can be thin, but seems to be improving. 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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