Max Borders‘ latest Ideas Matter update features a discussion of the policies that fueld Estonia’s post-communist boom:
An economy in ruins. The young prime minister was facing unbelievable odds. Mart Laar knew little about economics. He turned to one book: Free To Choose, the book based on the film. And the rest, as they say, is history.
Estonia implemented a flat tax rate like that recommended by Milton and Rose Friedman. Estonia become the Baltic Tiger, growing at about 10 percent per year up to 2006.
More recently Estonia has weathered the global recession very well — not by following the rest of Europe using monetary and fiscal Keynesianism, but by reducing government spending and balancing their budgets. They were back up to 8 percent growth in 2011.
