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How to cite:
Martin, K.; Väli, K. (2021): Country Profile of Estonia. Hannover. = ARL Country Profiles. https://www.arl-international.com/knowledge/country-profiles/estonia/rev/3735. (date of access).


The Republic of Estonia is a parliamentary republic. Estonia is located in northern Europe, on the eastern coast of the Baltic Sea. It is one of three Baltic countries. Its neighbouring countries are Russia to the east and Latvia to the south, and it is bordered to the north and the west by the Gulf of Finland and to the east by Lake Peipus. Its neighbouring countries to the north across the Baltic Sea is Finland and to the west across the Baltic Sea is Sweden. 

The official language of Estonia is Estonian. 68% of the population are ethnic Estonians. The largest minority group in Estonia are ethnic Russians (who make up 25% of the population). This makes Russian the second most spoken language in Estonia. The remaining 6% of the population of Estonia includes people whose ethnic nationality is Ukrainian, Belarusian, Finnish, Tatar, Latvian, Polish, Jewish, Lithuanian, German, Armenian, Azerbaijan and others (Statistics Estonia 2018).

Estonia has been a member of the European Union since 1 May 2004. 

General information

Name of country Estonia
Capital, population of the capital (2020) Tallinn, 437,619 (Statistics Estonia)
Surface area 45,340 km² (World Bank)
Total population (2020) 1,329,522 (World Bank)
Population growth rate (2010-2020) -0.15% (World Bank)
Population density (2020) 31.1 inhabitants/km² (World Bank)
Degree of urbanisation (2015) 33.11% densely populated areas (European Commission)
Human development index (2021) 0.890 (Human Development Reports)
GDP (2019) EUR 22,152 million (World Bank)
GDP per capita (2019) EUR 16,695 (World Bank)
GDP growth (2014-2019) 19.67% (World Bank)
Unemployment rate (2019) 4.45% (World Bank)
Land use (2018) 2.29% built-up land
31.47% agricultural land
55.74% forests and shrubland
1.14% nature
9.36% inland waters
(European Environment Agency)
Sectoral structure (2017) 68.1% services and administration
29.2% industry and construction
2.8% agriculture and forestry
(Central Intelligence Agency)

To ensure comparability between all Country Profiles, the tables were prepared by the ARL.

Administrative structure and system of governance

The Estonian political system is primarily comprised of the following institutions: 1) the people; 2) the parliament (Riigikogu); 3) the president; 4) the government. All issues concerning local life are decided and managed by local governments (European Commission 2017).

Figure 1: Administrative Structure of Estonia

Figure 1: Administrative Structure of Estonia

Administrative structure

The Estonian parliament (Riigikogu) is elected every four years. Parliament comprises 101 members and holds legislative authority. It has various tools and mechanisms at its disposal, including the power to issue a vote of no confidence in the government, the prime minister, or individual ministers (Pesti and Randma-Liiv, 2018). Its most important tasks are law-making, adopting resolutions, carrying out parliamentary supervision and conducting foreign relations (Parliament of Estonia, n.d.).

The government’s (valitsus) main responsibilities include:

  • implementing the domestic and foreign policies of the state; proposing legislation to parliament;
  • preparing and submitting the draft of the state budget to parliament;
  • administering and implementing the laws and resolutions of parliament;
  • administering and implementing the state budget; 
  • presenting a report on the implementation of the state budget for parliament (Pesti and Randma-Liiv 2018).

According to the Government Act (Vabariigi Valitsuse Seadus, VVS) the government cannot comprise more than 15 ministers including the prime minister (Vabariigi Valitsuse seadus – Riigi Teataja). The government is headed by the prime minister who is the political head of state and is comprised of 11 ministries, the Government Office and 15 county governments (maakond), as well as executive agencies and inspectorates, and their regional offices. Ministries are responsible for policy-making, and their subordinate agencies are mostly responsible for policy implementation. There are currently 15 ministers (including the prime minister) in the 11 ministries (Vabariigi Valitsus 2021).

The president is the head of state and supreme commander of the armed forces of Estonia. However, as Estonia is a parliamentary republic, the president is mostly a symbolic figure with honorary functions whose executive powers are limited. The president represents Estonia in international relations, may return a parliamentary act for revision, approves the dissolution of parliament, and proposes constitutional amendments (Pesti and Randma-Liiv 2018).

The provision of public services is a joint task between central and local government. Considering the vertical dispersion of authority between central and local government, Estonia is a small and very centralised country. Estonia (NUTS level 1 EE0) is a unitary state without self-governing regions which is divided into counties, rural municipalities and cities (Pesti and Randma-Liiv 2018). Under NUTS 3, the groups of counties are EE001 – Northern Estonia; EE004 – Western Estonia; EE008 – South Estonia; EE009 – Central Estonia; EE00A – Northeast Estonia (Eurostat, n.d.).

There are 79 local government units (municipalities – kohalik omavalitsus) in Estonia, comprising 15 urban municipalities/cities and 64 rural municipalities/parishes. All local authorities independently determine and organise all local issues. All local authorities have to implement the same tasks and provide the same range of services to their inhabitants regardless of their size (Ministry of Finance [Rahandusministeerium] 2017a).

Local affairs are managed autonomously by local governments
(rural municipalities and cities)

Rural municipalities and cities have equal legal status, and they form the local level of public administration in Estonia. All local governments operate within a county. County governments are part of central administration and represent the central government’s interests (Pesti and Randma-Liiv 2018). The Constitution of the Republic of Estonia provides a set of guarantees to local self-governments:

  • All local matters are determined and administered by local authorities, which discharge their duties autonomously in accordance with the law.
  • Each local authority has an independent budget which is drawn up in accordance with the principles and procedure provided by law.
  • Local authorities have the right, on the basis of law, to establish and levy taxes.
  • The administrative area of each local government may not be changed without hearing the opinion of the local authority (Pesti and Randma-Liiv 2018).

The cooperation between municipalities is organised through the work of national local government associations: the Association of Estonian Cities and the Association of Estonian Rural Municipalities. Local government associations still have a very low status as non-profit, non-government organisations (Pesti and Randma-Liiv 2018).

The Government of the Republic of Estonia is comprised of the prime minister and ministers. The prime minister represents the government and heads its work (European Commission 2018).

The state chancellery (Riigikantselei), directed by the state secretary, is part of the government. The state secretary is appointed to and released from office by the prime minister. The state secretary participates in sessions of the government with the right to speak. The state secretary, as the director of the state chancellery, has the same rights that are granted by law to a minister heading up a ministry (European Commission 2018).

The President of the Republic of Estonia is the head of state who represents executive power but stands apart from the government: the president is not subject to the government nor is the government subject to the president. The president represents the republic in international relations and also has some controlling and cooperation functions with regard to parliament and the government. The president has been vested with the right to proclaim laws passed in parliament. If the president refuses to proclaim a law passed by parliament, the law is sent back to parliament for additional debate and voting. If parliament does not amend the law, the president has the right to appeal to the Supreme Court to declare the law unconstitutional. Thus, the head of state has the power to impose a ‘postponing veto’, which does not allow them to take a final decision with regard to proclaiming a law. The President of the Republic of Estonia is entrusted with authority in a state of emergency. If parliament is unable to convene in an emergency situation, the president may, in matters of urgent national need, issue decrees, which have the force of law and which shall be considered immediately at the next assembly of parliament. As the supreme commander of national defence, the president also has an important role in other crisis situations (European Commission 2018).

Ministries are established, pursuant to law, for the administration of the various areas of government. A minister manages a ministry, administers issues within its area of government, issues regulations and directives on the basis of and for the implementation of law, and performs other duties assigned to them on the basis of and pursuant to procedures provided by law. The President of the Republic of Estonia may, following the proposal of the prime minister, appoint ministers who do not head up ministries (European Commission 2018).

Until 31 December 2017, county governments operated in all counties as regional governmental authorities, tasked with coordinating the cooperation of the ministries and other agencies of executive power, local agencies and local governments in the county and directing and coordinating the operation of state authorities under the county government. Following an administrative reform, the tasks of county governments have been divided between the agencies in the administrative area of the ministries and local governments, and the activities of the county governments have been ceased (European Commission 2018). 

Figure 2: Planning System Estonia

Figure 2: Planning System of Estonia

Estonia is an independent and sovereign democratic republic wherein the supreme power of the state is vested in the people. The powers of state are exercised solely pursuant to the constitution and laws. The activities of the government and the courts must be organised on the principle of the separation and balance of powers (European Commission 2018).

The supreme power of state is exercised by the people through citizens with the right to vote electing members of parliament or in a referendum (European Commission 2018). 

Legislative power is vested in parliament. The main task of parliament is drafting legislation: proceeding and passing laws and resolutions. In addition, parliament decides on holding a referendum; elects the president; ratifies and opposes international treaties; authorises the candidate for prime minister to form the government; decides on the expression of no confidence in the government, the prime minister or individual ministers; passes the state budget; declares a state of emergency within the state and a state of war; appoints certain offices, etc. (European Commission 2018). 

Executive power is vested in the Government of the Republic of Estonia but the government also participates in exercising legislative power. The government has the right to submit bills to parliament, and to prepare the draft of the state budget and submit it to parliament. The government executes the domestic and foreign policies of the state and manages relations with other states; directs and coordinates the activities of government agencies; administers the implementation of laws, resolutions of parliament, and legislation of the president; issues regulations and orders on the basis of and for the implementation of law; declares a state of emergency throughout the state or in a part thereof in a natural disaster or a catastrophe, or to prevent the spread of an infectious disease; performs other duties which the constitution and the laws vest in the government (European Commission 2018). 

All issues concerning local life are decided and managed by local governments that act independently in compliance with laws. Local government, as a democratically elected authority, has the right, competence and duty deriving from the constitution to independently organise and manage local issues in accordance to law. This is based on the legitimate needs and interests of the residents of the rural municipality or city, taking into account the specificities of development in the rural municipality or city. The representative body of a local government is the council (European Commission 2018). 

The functions of a local government include the organisation in the rural municipality or city of social assistance and services, welfare services for the elderly, youth work, housing and utilities, the supply of water and sewerage, the provision of public services and amenities, physical planning, public transport within the rural municipality or city, and the maintenance of rural municipality roads and city streets unless such functions are assigned by law to other persons. 

The functions of a local government also include the organisation, in the rural municipality or city, of preschool childcare institutions, basic and upper secondary schools, hobby schools, libraries, community centres, museums, sports facilities, shelters, care homes, health care institutions and other local agencies if such agencies are in the ownership of the local government. Law may prescribe the payment of specified expenses of such agencies from the state budget or other sources (European Commission 2018). 

To decentralise local power, local authorities may form rural municipalities or city districts with limited authority. The composition and operation of a rural municipality or city district is regulated by a statute of the local authority. Currently there are city districts in Tallinn and in Hiiumaa (following the local government reform) (Ministry of Finance [Rahandusministeerium] 2019).

Local authorities may form a rural municipality or city districts which have limited authority with the aim of decentralising power. The composition and operation of these rural municipalities or city districts are regulated by a statute established by the local authority (Ministry of Finance [Rahandusministeerium] 2019).

Municipal councils (Linnavolikogu/vallavolikogu) – All local issues are organised by the representative body of a local authority – the municipal council (volikogu) – which is elected by the residents of the municipality. The council is elected at general, uniform and direct elections by secret ballot for a term of four years (Ministry of Finance [Rahandusministeerium] 2019).

The management of the following issues is within the exclusive competence of the municipal council:

  • decisions related to the budget, taxes, fees and duties, loans and municipal property;
  • the alteration of the boundaries of a local government; the formation of municipal districts;
  • approval of the statutes and the development plan of the local government;
  • decisions on general issues concerning the municipal council and government (election of the chair of the council and the mayor, confirmation of a new municipality, determination of the wage conditions for the council and government, formation and liquidation of municipal council committees, etc.) (Ministry of Finance [Rahandusministeerium] 2019).

The main function of municipal councils is to make the most important and strategic decisions about local matters in education, culture, social welfare or public health and to direct the coordinated development of different aspects of local life (Ministry of Finance [Rahandusministeerium], 2019). The role of the council is the development of local policies, the establishment of strategic goals (including the directions of spatial development), and the development of the legal environment (Valner, n.d.).

The municipal council forms the executive body, i.e. the municipal administration (valitsus)
The mayor is the head of the municipal administration, which itself consists of departments and the municipal office (kantselei). The organisational structure of the municipal administration is determined by the municipal council and differs in smaller and bigger municipalities, though every local authority must have a city secretary or rural municipality secretary (linnasekretär, vallasekretär). The main tasks of the secretary are to prepare the materials for the sessions of the government and the council. The secretary is also responsible for ensuring that the regulations that are being passed are legally correct. In Tallinn and in other larger local authorities, the council office is separate from the government office (Ministry of Finance [Rahandusministeerium] 2019).

Local governments are autonomous in their activities, but in certain issues their activities
are supervised by ministries, offices and inspectorates that check compliance with the law and draw attention to potential problems (Valner, n.d.).

The Ministry of Justice (Justiitsministeerium) supervises the legality of the administrative acts of local governments.

  • The Chancellor of Justice of the Republic of Estonia supervises the compliance of local government legislation with the constitution and laws.
  • The National Audit Office supervises, within the scope of its competence, the use of the specific allocations made from the state budget, grants and money allocated for the performance of state functions and the lawfulness of the performance of those functions.
  • In addition, the activities of local governments are framed by various national sector-specific regulations and sectoral supervision (e.g. participation of the state in certain spatial planning processes) (Valner, n.d.).

According to the Local Government Organisation Act (Kohaliku omavalitsuse korralduse seadus – Riigi Teataja) the main function of local government is to organise the following in the city or municipality in question:

  • social assistance and services;
  • welfare services for the elderly;
  • youth work;
  • housing and utilities;
  • water supply and sewerage;
  • public services and amenities;
  • waste management;
  • spatial planning;
  • public transport within the town, city or municipality;
  • the maintenance of town or city streets and municipality roads;
  • preschool childcare institutions, basic schools, secondary schools, hobby schools, libraries, community centres, museums, sports facilities, shelters, care homes and health care institutions if they are in the ownership of the local authority.
Figure 3: System of powers Estonia

Figure 3: System of powers of Estonia

Spatial planning system

The main purpose of spatial planning is reaching an agreement about the principles and conditions of the development of an area of land. The Estonian planning system consists of six types of plans and proceeds from the principle that a plan at a more general level provides the basis for a plan at a more detailed level. Plans are divided into national, county, general and detailed plans, as well as special national and special local plans. National and county plans are prepared on the state level and their main objective is to express the spatial development needs of the state. Pursuant to law, local governments have extensive planning autonomy to prepare general and detailed plans for their territories or parts thereof. Special plans are prepared to determine the location of buildings that have a significant spatial impact on the level of the state or local government (Ministry of Finance [Rahandusministeerium] 2017b).

The Building Act (Ehitusseadus) was the first Estonian law on planning and came into force in 1939. The law was in effect for barely two years until the occupation of Estonia by the Soviet Union in the summer of 1940. The law regulated planning only in cities. During Soviet times, there was no planning law. Instead, different norms and rules provided guidance on the content and organisation of planning. Densely populated areas were generally planned. Toward the end of the Soviet period, various district planning projects were prepared for the entire territory of Estonia. These plans remained academic planning projects and had no effect on the development of settlements. The preparation of plans was centralised: the plans were prepared by state design institutes on behalf of the state (State Construction Committee). The task of the local authorities was to implement the plans approved by the state; they had little say in shaping the content of the plans. Local government did not exist in the Western sense; land was state-owned. Planning documents were classified and only for official use. The disclosure of plans was not required by law, but became more widespread towards the end of the Soviet era. In retrospect, it can be said that at the end of the Soviet era, the level of planning was quite good and fully comparable with the level of planning in the rest of Europe at that time. The preparation of the modern Planning and Building Act began even before the independence of Estonia on 20 August 1991. The Planning and Building Act (Planeerimis- ja Ehitusseadus, PES) entered into force on 22 July 1995. During the period of validity of the PES, ‘National Planning Estonia 2010’ (‘Üleriigiline planeering Eesti 2010’, established on 19 September 2000), county plans for the general territorial and economic development of all counties (established in 1998–2002) as well as many general plans and detailed plans for rural municipalities/cities were drafted. The county plan establishing ‘Environmental conditions guiding settlement and land use’ reached the final stage of compilation. The experience of drafting these plans as well as planning disputes and court decisions highlighted a number of shortcomings in the PES and the need for clarification and amendments. In 2003 a new Planning Act came into force. The new Planning Act sought to maintain the structure and wording of the previous Planning and Building Act (PES) to preserve consistency.  The biggest change in comparison to the PES is that the current law on planning, design and construction is divided into separate laws: the Planning Act (Planeerimisseadus) and the Construction Act (Ehitusseadus), which also came into force in 2003. The main reason for this change was the fact that the construction part of the act had been transferred from the Ministry of the Environment (Keskkonnaministeerium) (planning activities were previously under the Ministry of the Environment) to the Ministry of Economic Affairs and Communications (Kommunikatsiooniministeerium). The previous Planning and Building Act contained parts related to planning, design and construction (Ministry of the Interior [Siseministeerium], n.d.). 

Spatial planning in the country is organised by the Minister of Public Administration through the Planning Department within the Ministry of Finance (previously the Ministry of Internal Affairs and the Ministry of the Environment) (European Council for Spatial Planners, n.d.). Spatial panning is regulated by the Planning Act (Planeerimisseadus – Riigi Teataja).

The Estonian planning system is hierarchical. Spatial plans are divided into four main types: the national spatial plan, the county-wide plan, the comprehensive plan and the detailed spatial plan. In addition to the four main types, special plans can also be drafted. The plans prepared at the state level are the national spatial plan, the special state plan and the county-wide plan. The main goal of state plans is to ensure the functioning of the state as a whole and to ensure that the infrastructure required to support planned developments is present. The National Spatial Plan ‘Estonia 2030+’ (put into force by the Government in 2012) valid today sets the goal of ensuring the best possible quality of life for people in the existing settlement system, the maximum utilisation of the development potential of different regions and the smooth functioning of the settlement network. The National Spatial Plan provides general guidelines and a vision for the preparation of county-wide plans and comprehensive local government plans (Planeerimine.ee, n.d.). 

The National Spatial Plan is prepared for the entire territory and economic zone of the state. It may be prepared as a thematic plan for the planning of marine areas and the adjacent coastal area (the adjacent coastal area is defined as the zone within 12 miles of the coast) as well as the Exclusive Economic Zone. The purpose is to define spatial development principles and trends. A strategic environmental assessment is mandatory when preparing the national plan. The National Spatial Plan is the basis for the preparation of a county plan. The Ministry of Finance coordinates the preparation of the National Spatial Plan (Ministry of Finance [Rahandusministeerium] 2021). 

There is no regional government in Estonia. Therefore, the spatial plan at the regional level is compiled through county-wide plans, the purpose of which is to define the principles and trends of spatial development within a county. The obligation to prepare county-wide plans lies with the Regional Administration Department under the administration of the Ministry of Finance. In each county, these tasks are performed by the corresponding county service of the Regional Administration Department of the Ministry of Finance (Planeerimine.ee, n.d.).

The local government has extensive planning autonomy to prepare comprehensive and detailed plans for its territory. The purpose of the comprehensive plan is to define spatial development principles and trends for the entire territory of the rural municipality or city. Where no special plan or detailed spatial plan exist (and there is no requirement to create them), the main regulations for planning are based on the comprehensive plan. If there is a detailed plan or an obligation to prepare it, construction projects shall be designed on the basis of the established detailed plan. If there is a special plan drafted by the local government, this is the basis for the construction project (Planeerimine.ee, n.d.). 

As of 1 July 2015, the Planning Act provides for special plans to be drafted by the local government. A special local government plan is a plan combining the general plan and the detailed plan in one procedure, the task of which is to plan buildings with significant spatial impact if the location of such a building is not specified in the general plan. The list of buildings with significant spatial impact is established by the government (Planeerimine.ee, n.d.).

Special plans can also be made on the state level. The main task of the special state plan is to select the most suitable location for the construction of buildings important for the state (e.g. the international railway tunnel between Estonia and Finland). A special state plan must be drafted for the erection of a building with a significant spatial impact, the location or operation of which is of great national or international interest. The state-level special plans are coordinated by the Ministry of Finance (Ministry of Finance [Rahandusministeerium] 2021a).

Important stakeholders

Institution/stakeholder/authorities Special interest/competencies/administrative area
Ministry of Finance Spatial planning in the country is coordinated by the Minister of Public Administration through the Planning Department within the Ministry of Finance
Government of the Republic of Estonia The government initiates and establishes the national spatial plan
Ministry of the Interior Spatial planning was previously coordinated by the Ministry of the Interior
Local municipalities (local government) Local municipalities coordinate spatial planning within their jurisdictions

Fact sheets

List of references

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