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which groups of respondents dominated in the formation of one or another cluster. As a result of the analysis, three clusters were formed: • 1. This cluster formed around measures such as the strengthening of the social system, the strengthening of cultural identity, labour development and the promotion of industrial and technological policies. We called this the human capital-focused response pattern cluster. • 2. This cluster formed around measures such as the preservation of jobs, agricultural subsidies, barriers to prevent immigration as well as the strengthening of cultural identity and fighting crime. We called this the defensive-national-centred response pattern cluster. • 3. This cluster was the most diverse. On the one hand, it includes the main measures from the first cluster – the development of labour as well as industrial and technological policies. However, a number of other measures are also included, such as consolidation of the financial sphere; management of various non-economic risks; international cooperation for the prevention of crime and disease; and environmental conservation. We called this the cluster focused on institutional solutions for development and risk prevention. This cluster is characterised by a high percentage of measures related to international cooperation. Three measures play a formative role in two clusters simultaneously. These measures are the preservation of Estonia’s cultural identity, labour quality improvement as well as the development of industrial and technological policies. Emphases on national identity is connected to the first cluster with the means for strengthening Estonia’s potential in the international economy; in the second cluster, the same value is positioned in a protectionist context. It is understandable that the content and consequences of this aspiration may be different for different respondents. For some people, valuing the national identity may be connected to a desire to close Estonia off to external influences and dangers; while for others, it may be connected to the aspiration of having Estonia create its own high-tech industry. The fact that the majority of the economic policymakers, based on their preferences, are classified as belonging to the third cluster, is quite understandable, because their own activities are (or at least have been to date) quite focused on institutions and regulations (here, Estonia’s EU membership also probably plays a role). The breakdown of the entrepreneurs between clusters differs from that of the economic policymakers – most of them are positioned in the first cluster, which is focused on human capital. Although one of the factors forming the first cluster is the strengthening of social policies, and the majority of entrepreneurs are not among its supporters, the affiliation of the majority of entrepreneurs with the first cluster is determined by their support for labour development, and the promotion of industrial and technological policies. In the case of the entrepreneurs a certain underestimation of the importance of international Table 5.2.4 Breakdown of the different elite groups as to their response patterns, % of the group. Cluster types Human capital-focused response pattern Defensive-nationalcentred response pattern Response pattern focused on institutional solutions for development and risk prevention cooperation measures can be observed (see Table 5.2.4.). Unlike the economic policymakers, the human capital and social issues (along with international cooperation) are significant on the mental maps of the politicians, judging by their large percentage in the first cluster. The breakdown of the cultural figures is broadly similar to that of the general sample. The fact that defensive attitudes dominate in a relatively large portion of the recently graduated PhDs may be partly caused by the fact that there are more women among them than in the other clusters. It is assumed that protective attitudes are more typical of women than men. There are differences between opinions of people broken down in different clusters as to how well Estonia has succeeded, or has not, as do their attitudes toward the European Union. As for the assessment of the dynamics in Estonia’s affairs (see Fig. 5.2.1.) it turns out that the respondents, whose answers mainly relate to the defensive-national-centred cluster, display a noticeably more negative assessment of the dynamics of Estonia’s demographic situation, as well as the dynamics of security developments and the widening income gap . They have a more negative image of the European Union than the others, and most of them do not agree with the opinion that Estonia’s membership in the EU has mitigated the negative impacts of globalisation. In most cases, those affiliated by their preferences with the third cluster look at the developments in Estonia, through glasses that are much rosier than the others’. This does not only apply to topics like the competitiveness of the state, or the impact of foreign investments on Estonia, but also, for instance, to health, the sense of security, wealth inequality, and even demographic trends. At this point it could be speculated that, due to the nature of their professional activities, the representatives of this cluster may be less down-to-earth, especially when it comes to their perception of social problems. Judged by their degree of criticism, the respondents affiliated with the human capital-focused cluster are generally located between the two other clusters. At the same time, they are more critical than the others about the dynamic of Estonia’s economic competitiveness. Entrepreneurs Economic policymakers Politicians Cultural figures PhDs Total 54 26 49 34 32 37 15 12 16 26 36 22 31 62 35 40 38 41 200 Estonian Human Development Report 2012/2013
5.3 Development policies Erik Terk, Silja Lassur The level of institutional development in Estonia has improved consistently and is among the best in Central and Eastern Europe. At the same time, criticism, about some aspects of the current governance practices in Estonia, has started to increase. It has been asserted that governance, in Estonia, is characterised by a shift towards a universalistic and standard governance culture and procedures. Estonia’s governance practices are quite proper, but have certain shortcomings – its administrative and reactive nature, and a tendency towards autonomous operation of individual spheres of governance, rather than their cooperation and the involvement of various social groups in policymaking. Such a governance system tends to consider all activities to be equally important, and, in this framework, it is difficult to shape and focus on developmental preferences. A more focused and pro-active form of state governance is needed (Eesti 2010, b). This kind of criticism can also be found in the international surveys of Estonia’s institutional development, which are otherwise quite positively inclined (OECD 2011). 5.3.1 Policy priorities and the state The issue of focusing also applies to economic development and economic policies . Estonia has been praised for its success in maintaining macroeconomic stability, and this under very difficult external conditions. At the same time, it can be asserted that none of the conspicuously successful states in Europe or Asia have been able to develop their global competitive advantages based only on a macroeconomic stability and a favourable business environment (Chang, 2001). In this connection, the issue of “experiment-based economic policies” has been raised – of the need for the state to enact measures for the creation of new growth areas in the economy 1 (Kuusk, 2012). In Estonia, discussions about new growth areas and smart specialisation have gained momentum (especially at the initiative of the Estonian Development Fund), but this has not changed the dominant governance culture, or the economic policy dogma. Actual shifts related to the discovery and implementation of new growth areas have yet to be noticed. The elite groups, who participated in the survey, were quite unanimous regarding the focusing of policies. The prevailing position was that Estonia needs more focused policies and clearer priorities – this was the answer given by 80% of the respondents. The entrepreneurs and economic policymakers were the most resolute concerning this topic. Focuses and priorities do not necessarily have to come from the “top”; they can also develop as the result of the collaborative processes of people representing different social groups. However, the process of priority setting requires coordination on the level of the society as a whole. Therefore, we cannot ignore the necessary role of the state institutions in this process. We asked the representatives of Estonia’s elite groups to choose policy spheres from a pre-determined list, which required the strengthening of national policies, in the near future. The results are shown in Figure 5.3.1. Figure 5.3.1 Support for increasing the state’s role in various policy areas, % Total PhDs Cultural figures Politicians Economic policymakers 90 80 70 60 50 40 30 20 10 0 90 80 70 60 50 40 30 20 10 0 Ensuring regional development Improving social security, supporting people in need Organising education Promotion of research Shaping businessand investmentsfriendly economic environment Health insurance and promotion of health Promotion of innovation Management of migration processes Percentage Shaping Estonia’s economic structure Improvement of natural environment Management of ethnic relations in Estonia Promotion of culture 1 Total growth areas are not considered to be traditional economic sectors, but narrower fields of activity which frequently overlapping different traditional sectors. Estonian Human Development Report 2012/2013 201
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ESTONIAN HUMAN DEVELOPMENT REPORT 2
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Table of Contents 1 Human Capital /
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Dear Reader Since the moment when E
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1Human Capital Estonian Human Devel
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the HDI’s content has also been h
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Figure 1.1.1 The human development
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Figure 1.1.7 The income sub-index:
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The results of the Princeton Projec
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the hypothetical generation. The to
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Figure 1.2.3 Life expectancy. Eston
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Table 1.2.2 also presents the most
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The new trends that are appearing i
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Figure 1.2.8 Components of populati
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New features were introduced into E
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Initiation of Voluntary Birth Contr
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Table 1.3.1 Best-known educational
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(OECD 2012b). Therefore a certain r
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The reciprocal dependence of the pr
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Figure 1.3.8 Percentage of students
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Table 1.3.4 The quality of educatio
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1.4 Health Raul-Allan Kiivet Change
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Table 1.4.1 Usage of prescription m
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allude to the fact that approximate
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promote healthy lifestyles among th
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Figure 1.5.1 The World Values Surve
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Table 1.5.2 Estonia’s participati
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Figure 1.5.3 The percentage of the
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Figure 1.5.5 Percentage of the Esto
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The fact that Estonia’s position
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Summary Mati Heidmets The global vi
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2People and Society Estonian Human
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Table 2.1.1 Structure of the Bertel
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tioning market economies (15 states
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2.2 Freedom and democracy Martin M
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Table 2.2.1 Democracy indicators Po
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Figure 2.2.2 The distribution of th
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would be something that none of the
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political participation are general
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strongest, while a very small perce
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is concerned, Estonia is one of the
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Figure 2.4.2 Average circulation of
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2.5 Corruption Jüri Saar In accord
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Lithuania, 61%; and in Russia, 69%.
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2.6.2 Intentional homicides in Esto
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crime. And thirdly, there was a wis
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References 1. Ahven, A. & Tabur, L.
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states included in the EU Kids Onli
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2.8 Public assessments of the state
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Figure 2.8.4 Changes releated to tr
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of the state’s development are en
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Table 2.9.1 The positions of Estoni
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3. IEP (2011). Structures of Peace.
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3Welfare and the Quality of Life Es
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choices made, not what people say t
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Figure 3.1.5 Public social spending
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tion agreed upon the social contrac
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References 1. Aidukaite, J. (2006).
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hand, to the “inequality of acces
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and explanations of the extent of i
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5- much more than I deserve. Some d
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people in Estonia consider the inco
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Table 3.3.1 Experienced Well-Being
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at about 70%. In Latvia and Lithuan
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sign. It seems that the usual view
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3.4 Quality of life Anu Toots 3.4.1
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a uniform composite indicator has n
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3.4.6 The components of life qualit
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Figure 3.4.4c Perceived quality of
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Figure 3.4.5 Changes in the depriva
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3.5 Environment dimension of well-b
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Figure 3.5.1.b Estonia’s position
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3.5.4 Energy intensity The energy i
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productivity, which is defined as t
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perceive themselves as worse off th
Page 151 and 152: 4The Economy Estonian Human Develop
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Page 155 and 156: Figure 4.1.3 Components of economic
Page 157 and 158: ule of law, the sub-indicators for
Page 159 and 160: References 1. Acemoglu, D.; Robinso
Page 161 and 162: Development Report employs generali
Page 163 and 164: and pasture land, and this was capi
Page 165 and 166: Basing the total and net savings re
Page 167 and 168: 4.3 Labour market Reelika Leetmaa,
Page 169 and 170: The problems include the very limit
Page 171 and 172: • Expenditures for active labour
Page 173 and 174: who lose their jobs. These ensure i
Page 175 and 176: 4.4 Productivity and the economic s
Page 177 and 178: labour costs at the company level r
Page 179 and 180: Table 4.4.4 Comparison of the produ
Page 181 and 182: Figure 4.4.1 Annual average increas
Page 183 and 184: 4.5 Innovation Erik Terk, Katrin M
Page 185 and 186: Table 4.5.2 Comparison of innovatio
Page 187 and 188: Table 4.5.4 Comparison of the indic
Page 189 and 190: in order to make the R&D potential
Page 191 and 192: It is characteristic of the South K
Page 193 and 194: mechanisms for increasing their sta
Page 195 and 196: Globalisation and Policy Patterns 5
Page 197 and 198: When Estonia regained its independe
Page 199 and 200: 5.2 The impacts of globalisation an
Page 201: Table 5.2.2 Support of the differen
Page 205 and 206: • C -the “Estonia-centred” su
Page 207 and 208: Figure 5.4.1 Support for the possib
Page 209: Summary Erik Terk Estonia is part o
Page 212 and 213: ehavioural patterns. Therefore, it
Page 214 and 215: EDR 2012/2013 authors Clemens Buche
Page 216 and 217: EDR 2012/2013 authors Alari Purju i
Page 218: Editor-in-Chief: Mati Heidmets Prod
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