ABSTRACT
This chapter provides an overview of the regional disparities emerging in Estonia as well as an analysis of their origins and future development scenarios. The current administrative system in Estonia is both expensive and complex. Extensive reform was proposed at the end of 1996 by the Minister of Finance, the Minister of Transport and Communications and the Minister of Economic Affairs and caused considerable debate. The costs of mergers should also be taken into account as an objective obstacle - the estimated cost of merging two small municipalities is around two million Estonian kroons. Within the framework of the former Soviet Union, the territorial pattern of Estonian industry became highly concentrated. In order to achieve a higher level of efficiency in the use of finance, the State is focusing on the promotion of regional policy through the coordination of various institutions.
