Name: How Estonia—Yes, Estonia—Became One of the Wealthiest Countries in Eastern Europe | Luis Pablo de la Horra
Brand: fee.org
SKU: fee-org-14
Availability: OnlineOnly

critic

How Estonia—Yes, Estonia—Became One of the Wealthiest Countries in Eastern Europe | Luis Pablo de la Horra

preview

Estonia is the living example that human progress is closely linked to economic freedom.The question of why some countries are rich and prosperous whereas others seem to be condemned to the scourge of poverty has been around for centuries. Many factors have been argued to be the determinants of prosperity: geographical, cultural, historical, etc.&nbsp;Yet, since at least the publication in 1776 ofThe Wealth of Nations,we know that political and economic institutions play a decisive role in this respect. Free trade, a reliable legal framework that protects private property and enforces contracts, and sound money are necessary conditionsfor countries to thrive.The emergence and consolidation oftook hundreds of years in countries like the UK and the US. However, in recent decades we have seen that the right policies can significantly speed up economic development.Estonia is a paradigmatic example of this.On Aug. 20, 1991, Estonia gained its independence after 51 years under the yoke of communism. The country was first occupied by the Red Army in June 1940 under the umbrella of the German-Soviet Non-Aggression Pact, whereby the two totalitarian states divided Eastern Europe into spheres of influence. One year later, the Nazi Army invaded the Soviet Union, occupying Estonia until 1944, when the Soviets retook the country. The political instability in the Soviet Union during the early 90s precipitated the restoration of democracy in the Baltic country.From day one, the new government committed to undertakingthat laid the foundations for a successful transition from socialism to capitalism. The political agenda included monetary reform, the creation of a free-trade zone, a balanced budget, the privatization of state-owned companies, and the introduction of a flat-rate income tax.One of the architects of this pro-market agenda was Mart Laar, Estonia’s Prime Minister during two periods: 1992-1994 and 1999-2002. Laar hasthat he took inspiration from Milton Friedman’s bestseller&nbsp;in order to implement his ambitious free-market reform plan.These reforms paved the way for the incredible rise in living standards that Estonia has experienced since independence. Today, Estonia is considered a high-income country by the World Bank, and it is a member of the EU and the Eurozone. The purchasing power of Estonianspercent over the last two decades despite the severe impact the 2008 financial crisis had on the Baltic economies. In addition, life expectancy has moved from 66 years in 1994 to 77 years in 2016.Estonia is ranked among the top countries in terms of. Government finances are healthy as shown by the fact thatis only 9.5 percent of GDP. In terms of the labor market, Estonia’sis 5.3 percent, well below the EU average. Finally, its efficient and attractive(undistributed profits aren’t taxed) has placed Estonia as a worldwide center for high-tech companies, boosting foreign investments and economic growth.When compared to the other former Soviet Republics, Estonia’s progress is even more astonishing., Estonia ranks first ahead of countries such as Russia or Latvia and well above the median income. The picture is similar when it comes to other indicators likeor, where Estonia shows that economic progress has a real impact on the living standards of people. &nbsp;&nbsp;Estonia is the living example that human progress is closely linked to economic freedom. However, there are many others. Countries that not so long ago were extremely poor are abandoningthanks to capitalism. The recipes for economic growth and progress are known. The only thing we can do is to spread the word so that all countries have the opportunity to improve their living standards like Estonia did in the early 1990s.Reprinted from .This page relies heavily on JavaScript.Please, and reload the page to enjoy our modern features.Open CommentsThis work is licensed under a Creative Commons Attribution 4.0 International License, except for material where copyright is reserved by a party other than FEE.Please do not edit the piece, ensure that you attribute the author and mention that this article was originally published on FEE.org

Estonia is the living example that human progress is closely linked to economic freedom.The question of why some countries are rich and prosperous whereas others seem to be condemned to the scourge of poverty has been around for centuries. Many factors have been argued to be the determinants of prosperity: geographical, cultural, historical, etc.&nbsp;Yet, since at least the publication in 1776 ofThe Wealth of Nations,we know that political and economic institutions play a decisive role in this respect. Free trade, a reliable legal framework that protects private property and enforces...

public

Luis Pablo de la Horra

The Foundation for Economic Education (FEE) is a libertarian economic think-tank dedicated to the "economic, ethical and legal principles of a free society." FEE publishes books, daily articles, and hosts seminars and lectures. Founded in 1946 by Leonard E. Read, Henry Hazlitt, David Goodrich, Donaldson Brown, Leo Wolman, Fred R. Fairchild, Claude E. Robinson, and Jasper Crane, the foundation is the oldest free-market think tank in the United States.

How Estonia—Yes, Estonia—Became One of the Wealthiest Countries in Eastern Europe | Luis Pablo de la Horra

No article scores yet.

CRITIC REVIEWS

PUBLIC REVIEWS