Impact of Social Environment on Economic Development in the Baltic States

The Baltic States regained independence and started the pathway from command economy to market economy and entered European Union at the same time. Latter internationally recognized evaluations for the countries are diverse. The present diversity of the Baltic States ’Economic Development is a subject of interest because of the similarities – all three are small, open economies, countries have similar geographic location and initially likewise historical and political backgrounds. This article explains relationship between social environment, business environment and economic growth. It argues that the elements of social environment underlie more successful economic development. It researches the causes, why Estonia has performed better in economic outcomes and development. The article analyses selection of socio-economic indicators of all three Baltic States – Latvia, Lithuania and Estonia for the time period of ten years to include the influence of economic cycles. Keywords—Baltic States, economic development, economic growth, level of education, social environment.