Estonia's Economic Development : Trends, Practices, and Sources

This paper is a case study of an open small economy whose development and growth is based largely on foreign trade and foreign direct investment (FDI). One purpose of the paper is to uncover the causes that have created such a development pattern....

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Bibliographic Details
Main Authors:	Lumiste, Rünno, Pefferly, Robert, Purju, Alari
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	ACCOUNTING AGRICULTURE ALCOHOLIC BEVERAGES AUCTIONS AUTARCHY BALANCE OF PAYMENTS BANK DEPOSITS BANKING SECTOR BANKING SYSTEM BENEFICIARIES BUSINESS ENVIRONMENT CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL MARKETS CAPITAL MOVEMENTS CENTRAL BANK CLIMATE CHANGE COMMAND ECONOMY COMMERCIAL BANK COMMODITY COMMUNICATION TECHNOLOGY COMPETITIVENESS COMPREHENSIVE STRATEGY CONSUMER GOODS CONSUMER PRICE INDEX CONSUMERS CORPORATE INCOME TAXES CORPORATE TAX CREDIBILITY CURRENCY BOARD DEBT DEMOCRATIC SOCIETY DEVALUATION DIRECT INVESTMENTS DOMESTIC CAPITAL DOMESTIC CURRENCIES DOMESTIC MARKET DOMESTIC PRICES DRIVING ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC LIBERALIZATION ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC POWER ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RELATIONS ECONOMIC STRUCTURE ECONOMIC TOOLS ECONOMIC VALUE ENERGY RESOURCES ENFORCEMENT SYSTEM EQUITY CAPITAL EXCHANGE CONTROLS EXCHANGE RATE EXCHANGE RATES EXCISE TAXES EXPENDITURES EXPORT MARKET EXPORTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FISCAL POLICIES FISCAL POLICY FIXED CAPITAL FIXED EXCHANGE RATE FIXED PRICES FOREIGN CAPITAL FOREIGN COMPANIES FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTMENTS FOREIGN INVESTORS FOREIGN MARKETS FOREIGN OWNERSHIP FOREIGN TRADE FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FUEL FUELS GASOLINE GDP GDP PER CAPITA GOVERNMENT BUDGET GROSS FIXED CAPITAL FORMATION GROWTH RATE GROWTH RATES HARMONIZATION HOLDING HOST COUNTRIES INCOME INCOME TAX INDUSTRIAL COUNTRY INDUSTRIAL ECONOMIES INFLATION INFORMATION TECHNOLOGY INSTITUTIONAL ENVIRONMENT INSTRUMENT INSURANCE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVENTORIES INVESTMENT DECISIONS INVESTMENT OPPORTUNITIES INVESTMENT RATE IPO ITC JOINT VENTURE JOINT VENTURES JOINT-STOCK COMPANIES LAISSEZ FAIRE LAISSEZ FAIRE POLICY LEGAL FRAMEWORK LEGAL SYSTEM LESS DEVELOPED COUNTRIES LIBERALIZATION OF TRADE LIQUIDATION LOAN LOCAL GOVERNMENTS MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MANUFACTURING INDUSTRIES MARKET ACCESS MARKET COMPETITION MARKET ECONOMIES MARKET ECONOMY MARKET PRICES MARKET REGULATIONS MARKET STRUCTURE MARKET TRANSACTIONS MIDDLE-INCOME COUNTRY MOBILE PHONES MONOPOLIES NATIONAL CURRENCY NATIONAL INFRASTRUCTURE NATURAL RESOURCE NATURAL RESOURCES NEW MARKETS NEW PRODUCTS OPEN ECONOMY OUTPUT OUTPUT LOSSES OWNERSHIP STRUCTURE PENETRATION RATE PENSION PENSIONERS PENSIONS PER CAPITA INCOME PLANNED ECONOMIES PLANNED ECONOMY POLITICAL STABILITY POLITICAL SYSTEM POSITIVE EFFECTS POTENTIAL INVESTMENTS PRICE INCREASES PRICE STABILITY PRIVATIZATION PRODUCTION COSTS PUBLIC POLICY PUBLIC TRANSPORTATION PURCHASING POWER RAIL RAIL SERVICE RAILWAY RAPID GROWTH REAL ESTATE REAL GDP REGULATORY FRAMEWORK REGULATORY REGIMES RETURN ROAD SAVINGS SECURITIES SINGLE MARKET SMALL ECONOMY SOCIAL COSTS SOCIAL INSURANCE SYSTEM STOCKS TAKEOVER TAX RATE TAX RATES TAXATION TECHNICAL ASSISTANCE TECHNOLOGICAL CHANGES TECHNOLOGY TRANSFER TELECOMMUNICATIONS TRADE ASSOCIATION TRADE BALANCE TRADE BARRIERS TRADE DEFICIT TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE PROTECTION TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SECTORS TRADING TRANSACTION TRANSACTION COSTS TRANSIT TRANSIT SERVICES TRANSIT TRADE TRANSITION ECONOMIES TRANSITION ECONOMY TRANSPORT TRANSPORT EQUIPMENT TRANSPORTATION TURNOVER UNDERVALUATION UNEMPLOYMENT URUGUAY ROUND VALUE ADDED VEHICLES WAGES WEALTH WORLD TRADE WORLD TRADE ORGANIZATION WTO
Online Access:	http://documents.worldbank.org/curated/en/280881468025510249/Estonias-economic-development-trends-practices-and-sources http://hdl.handle.net/10986/28035

Description
Summary:	This paper is a case study of an open small economy whose development and growth is based largely on foreign trade and foreign direct investment (FDI). One purpose of the paper is to uncover the causes that have created such a development pattern. Estonia is a former socialist economy, part of the Former Soviet Union (FSU), which introduced comprehensive structural and institutional reforms in the 1990s. The country's transition to a market economy has been enhanced by integration with the European Union (EU), which was very important in evolution of institutions. Other research in this paper concerns the role of external anchors upon economic development; that is, mandates that reflect the values, objectives, and aims of a socioeconomic alliance, and which also frame Estonia's economic policy. One conclusion of the paper is that the EU integration process played an important role in creating and supporting development of a liberal, private sector-based market economy. Implementation of the rules, standards, and norms helped to increase the competitiveness of Estonian companies by improving market access to the EU and other markets. The external anchor concept is related to the international agents. A critical factor for future development and structural changes will be transforming Estonia from a transition economy to an innovation economy. The paper examines the role of the information and communication technology (ICT) sector and Skype in this development. The case of Skype demonstrates the much wider impact of the new telecommunication technology on society. Estonia's development in this field is empirical evidence that location, production, technology, and timing along with external anchors represent a catalyst for change.

Estonia's Economic Development : Trends, Practices, and Sources

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