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Dear Reader Since the moment when Estonia restored its independence 22 years ago, we have almost always been on our way. On our way back to the West. To Europe. To the world. Back to the company of states that are free, wealthy and determine their own fates. On this road, we have used the aquis communitaire, that is, the chapters of the European Union’s accession plan, to measure our capability. We occupied an important place on the roadmap established by NATO; years later, we adjusted ourselves to the Maastricht criteria, which determined if we were mature enough for the euro area. Through it all, we have been interested in knowing who is ahead of us and who lags behind. Now these countless interim finishes and accessions are starting to fade from memory. That’s the way it should be, because we have arrived in the West, in Europe and in the world, and are among the most developed states in the world. We regard the fact that we belong to all the organisations that are important to us with calm presumption. The desire to measure and compare is part of human nature. This is also true in Estonia, where most of us have participated directly in the impressive progress of the state and the society. I have nothing against rankings, if they remain within the limits of science and common sense. After all, without making comparisons, we cannot find out what we have done well and where we need to make an extra effort. All the more because many of the charts are also tracked by those whose attention and favourable predisposition we require. For example, the Index of Economic Freedom says more to companies that are planning foreign investments than a glossy ad, paid for by the state, in a business newspaper with a global circulation. The best rankings are those which are comprised of a great number of fundamental components. In the developed world, the assessment of a population’s level of education has not been based on the rate of literacy for a long time, but rather on lifelong learning and tertiary education. Continued instability in the euro area and elsewhere has prompted a critical assessment of debt levels, the percentage of social costs and GDP ratios. Thus, it has turned out that some states that were considered to be fairly wealthy based on previous calculations are actually lagging behind, because their high rankings were the result of borrowed wealth, rather than sustainable policies. In order to adequately discern Estonia’s position in a comparison with the other nations of the world, we must look behind the scenes of the international rating industry. In this way we can determine which is wheat and which is chaff. This is the topic that this Estonian Human Development Report dissects, familiarising us with the backgrounds of the rankings that, based on their methodologies, are most reliable, and therefore, also worth taking seriously. Estonia’s position in this international comparison allows each one of us to come to objective conclusions about the road we have taken to date and the choices that await us. Kadriorg, 22 April 2013 Toomas Hendrik Ilves President of the Republic of Estonia 4 Estonian Human Development Report 2012/2013
Foreword Estonia has been part of the open world for two decades. This means it is dependent on global trends, and also has the opportunity to shape these trends. The 2013 Estonian Human Development Report asks the following questions: What does Estonia look like against the global background? How well have we coped with the matters, ideas and policies that should be dealt with in the global marketplace? The view of Estonia provided in this report is based on a traditional UN human development approach, as well as on many other yardsticks and bases of comparison. The first UN Human Development Report, which was issued in 1990, was a trailblazer. Under the aegis of the global organisation, the states and peoples of the world started to be compared and ranked. Everyone was provided with a glimpse of how they appear against a global background. The evaluation was based on something new at the time – on human development. The idea was to combine various measures of a life worthy of human dignity. Health- and education-related indicators were added to the already standard gross domestic product (GDP). The authors of the first report justified their approach as follows: “The central message of this Human Development Report is that while growth in national production (GDP) is absolutely necessary to meet all essential human objectives, what is important is to study how this growth translates – or fails to translate – into human development in various societies.” The UN initiative to compare the development of peoples, from various points of view, with the help of combined yardsticks, fell on fertile ground. The development paradigm had clearly assumed the dominant position in the Western world. This is a viewpoint that values movement and change, gives direction to change, and tries to measure the efficiency of movement. Indeed, here and now we are also establishing developmental goals, creating development plans and founding development funds; we support developing countries and provide development assistance. Development is good. The inability to develop is bad. Things that are good and important should be measured. Actually, the measurement of both human development and society’s progress is a difficult and contradictory undertaking. The UN rankings have also been criticised. Doubts continue to be voiced about whether the three yardsticks (health, education, wealth) are so universally human and applicable that it is appropriate to compare Americans to Hindus, or Estonians to Ethiopians, based thereon, and to draw conclusions about someone’s developmental success or backwardness. Despite the criticism, the desire to be compared to others, and to organise the comparisons into rankings, has triumphed. Hundreds of new measures and yardsticks have developed alongside the Human Development Index. States and peoples are compared, based on their level of democracy and corruption, freedom and peacefulness, innovation and digitalisation, equality and happiness, and dozens and dozens of other criteria. The majority of these measurements make authors speak about development – directly or indirectly, intentionally or unintentionally. A high level of corruption, or low level of innovation, indicates that a state or people must make greater efforts in its development. The international assessment of development has become a separate field of activity. The classifications and rankings created for it have become important opinion makers and policy influencers. There are various yardsticks used to evaluate development. Some are based on respectable theoretical baggage (such as population processes, or examinations of economic development). In the case of others, the approach is still taking shape (for instance, the evaluation of “peacefulness”). Despite the complaints that the comparisons are superficial and ignore cultural differences, etc., the industry of producing development-related comparisons has spread to all spheres of life. The media eagerly informs us whether Estonia’s position has risen or fallen in one or other global ranking. And we have to accommodate this knowledge into our conceptual space. The 2013 Estonian Human Development Report examines the measures for development around the world, and asks what this complicated and diverse flow of messages tells us about Estonia’s position in the world. Where do we seem to be very capable? Where are we in danger of falling behind? Chapters 1 to 4 of the report deal with various fields of development (human development, social organisation, well-being and quality of life, economics and competitiveness). Chapter 5 looks into the future, by examining the attitudes and preferences of Estonia’s elite groups in shaping future developments. So, enjoy thinking along with us! Mati Heidmets Editor-in-Chief Estonian Human Development Report 2012/2013 5
Page 1: ESTONIAN HUMAN DEVELOPMENT REPORT 2
Page 4 and 5: Table of Contents 1 Human Capital /
Page 9 and 10: 1Human Capital Estonian Human Devel
Page 11 and 12: the HDI’s content has also been h
Page 13 and 14: Figure 1.1.1 The human development
Page 15 and 16: Figure 1.1.7 The income sub-index:
Page 17 and 18: The results of the Princeton Projec
Page 19 and 20: the hypothetical generation. The to
Page 21 and 22: Figure 1.2.3 Life expectancy. Eston
Page 23 and 24: Table 1.2.2 also presents the most
Page 25 and 26: The new trends that are appearing i
Page 27 and 28: Figure 1.2.8 Components of populati
Page 29 and 30: New features were introduced into E
Page 31 and 32: Initiation of Voluntary Birth Contr
Page 33 and 34: Table 1.3.1 Best-known educational
Page 35 and 36: (OECD 2012b). Therefore a certain r
Page 37 and 38: The reciprocal dependence of the pr
Page 39 and 40: Figure 1.3.8 Percentage of students
Page 41 and 42: Table 1.3.4 The quality of educatio
Page 43 and 44: 1.4 Health Raul-Allan Kiivet Change
Page 45 and 46: Table 1.4.1 Usage of prescription m
Page 47 and 48: allude to the fact that approximate
Page 49 and 50: promote healthy lifestyles among th
Page 51 and 52: Figure 1.5.1 The World Values Surve
Page 53 and 54: Table 1.5.2 Estonia’s participati
Page 55 and 56: 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
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4The Economy Estonian Human Develop
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vide a valuable connection for maki
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Figure 4.1.3 Components of economic
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ule of law, the sub-indicators for
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References 1. Acemoglu, D.; Robinso
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Development Report employs generali
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and pasture land, and this was capi
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Basing the total and net savings re
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4.3 Labour market Reelika Leetmaa,
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The problems include the very limit
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• Expenditures for active labour
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who lose their jobs. These ensure i
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4.4 Productivity and the economic s
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labour costs at the company level r
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Table 4.4.4 Comparison of the produ
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Figure 4.4.1 Annual average increas
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4.5 Innovation Erik Terk, Katrin M
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Table 4.5.2 Comparison of innovatio
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Table 4.5.4 Comparison of the indic
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in order to make the R&D potential
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It is characteristic of the South K
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mechanisms for increasing their sta
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Globalisation and Policy Patterns 5
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When Estonia regained its independe
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5.2 The impacts of globalisation an
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Table 5.2.2 Support of the differen
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5.3 Development policies Erik Terk,
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• C -the “Estonia-centred” su
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Figure 5.4.1 Support for the possib
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Summary Erik Terk Estonia is part o
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ehavioural patterns. Therefore, it
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EDR 2012/2013 authors Clemens Buche
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EDR 2012/2013 authors Alari Purju i
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Editor-in-Chief: Mati Heidmets Prod
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