No. 39



The Impact of the Estonian Administrative Reform of 2017 on Settlement and Regional Economic Development

05 June 2019


RiTo No. 39, 2019

  • Garri Raagmaa

    Director, Pärnu College of the University of Tartu, Associate Professor of Regional Planning

The article assesses the impact of the Estonian administrative-territorial reform of 2017 on settlement and regional economic development.

The main problem of the administrative-territorial reform was that it focused on administrative efficiency, and ignored the objectives set out in the Administrative Reform Act, in particular the using of regional development preconditions, increasing of competitiveness, and ensuring of a more consistent regional development, as well as the integrity of the settlement system. Reformation of administration is mostly a political issue, and it seldom takes place on scientifically grounded bases. The administrative structure, and the distribution of public functions and the budget between the central, regional and local authorities have a significant impact on settlement development and the general regional balance.

Estonia is situated in the periphery of Europe, cities are small here, and they are located far from each other. Providing rural areas with services and, increasingly, the variety of jobs offered depends on the global competitiveness of the businesses, which is however influenced by the business environment shaped by public authority, and the prominence and reputation of the location. The quality of life in any region depends on the central city where services are available, where most of the jobs are located, and where there are cultural institutions and meeting places. Estonia has been urbanising at a faster rate in Europe over the last decade: people are moving to the urban regions of Tallinn and Tartu. Rural settlements and small and county cities are losing residents: the smaller the settlement and the greater the distance from Tallinn, the faster the process. The growth of megacities and overurbanization is taking place in ultracentralised and failed countries that are incapable of implementing policies to balance spatial development.

Urbanisation takes place in waves: migration flows are influenced by the population age structure, real estate prices, mobility, fashion, and policies with a spatial impact. In the last few decades, in a number of Western European countries and the USA, the global metropolisation has reverted to suburbanisation and counterurbanisation as it was experienced in the 1980s. A technological change is going on. Work is increasingly independent of space. Under the pressure of climate change, ecological way of life is becoming more popular: organic food, green energy and the expanding silver economy need much more space and considerably change the economic geography. With the return of the Cold War, preservation of viable low density areas is strategically vital for Estonia again.

With the elimination of county governments, functional areas (except Saaremaa) were left without the management level. Local government associations are expected to fill the vacuum, but scarce funding does not motivate joint activities or allow county cities to develop the services needed in the region. The strength of the central city and the size of its actual rear land should be the determining factors when delimiting the administrative structure in the 21st century. Capability to communicate globally and ability to create knowledge-intensive jobs that require relevant institutions is a value in its own right. Settlement changes very slowly but a correction of the errors of the administrative-territorial reform must not be postponed to an indeterminate future. It will have to be undertaken at once in the implementation of regional strategies. It took ten years for Latvia to understand it.