August 9, 2007 | By Nathaniel Ward

How Estonia overcame communism

Decades under the Soviet boot meant that captive nations like Estonia were unable to develop economically. But today, Estonia has one of the most dynamic economies in Europe and ranks 12th in The Heritage Foundation’s Index of Economic Freedom, ahead of countries like Japan and Germany.

What happened? “Radical reforms in the 15 years since 1992 have changed Estonia beyond recognition from its communist days,” former Estonian Prime Minister Mart Laar writes in a new Heritage paper. His country introduced a flat tax on income, transitioned to private ownership of property, deregulated the economy and more.

Laar, who served as prime minister from 1992 to 1994 and 1999 to 2002, elaborated Wednesday on how he led his country out of poverty in an address at The Heritage Foundation.

In his paper, Laar also outlined the importance of holding to principle: “Looking back on Estonia’s transition from misery to prosperity, I can say from personal experience that the prime minister’s task is not to be popular, but to build a working coalition, have a clear program of what to do, and then have the courage to make the decisions.”

Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.