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65
Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
Cultural Leadership and Entrepreneurship
as Antecedents of Estonia’s Singing Revolution
and Post-Communist Success
Olga Nicoara
Department of Business and Economics,
Ursinus College
601 E Main St.,
Collegeville, PA 19426, USA
E-mail: onicoara@ursinus.edu
Abstract: The Baltic people of Estonia, Lithuania, and Latvia gained
recognition with their successful use of a cultural tool, singing
folkloric songs, to protest collectively against their common Soviet
oppressor in the summer of 1988, preceding the collapse of the Soviet
Union. Rational-choice theorists have argued that large rebellious
movements are paradoxical because the larger the number of
potential revolutionaries, the greater the leadership, participation,
and coordination problems they face (Olson, 1971; Tullock, 1974).
This paper investigates Estonia’s Singing Revolution and illustrates
how ethnic Estonians used their shared cultural beliefs and singing
traditions as a tacit, informal institutional solution to overcome the
collective-action problems with organizing and participating in mass
singing protests against the Soviet regime. The paper goes further
to extend the standard rational-choice framework and to include a
more dynamic, entrepreneurial-institutional perspective on socio-
cultural change by accounting for the role of cultural leaders as
cultural entrepreneurs, a subset of institutional entrepreneurs. The
success of Estonia’s Singing Revolution can be ultimately attributed
to leadership in the form of cultural entrepreneurship going back
to pre-Soviet Estonian times. The revived legacy of ancient shared
beliefs, folkloric practices, and singing tradition represented the
necessary social capital for the Estonian people to voice collectively
shared preferences for political and economic governance during a
window of constitutional opportunity. Mikhail Gorbachev’s Glasnost,
doi: 10.1515/bjes-2018-0016 Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
66
Olga Nicoara
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
a policy aimed to improve Soviet formal institutions by fostering
freedom of speech and political transparency, also provided a
context propitious for the Singing Revolution because it lowered the
perceived costs of participation in the rebellious singing and opened
a window of opportunity for political change.
Keywords: culture, embedded agency problem, entrepreneurship, Estonia,
leadership, paradox of revolution, self-governance, Singing
Revolution, social capital, social change, JEL Codes: D7, N4, P2, Z1
1. Introduction
The Singing Revolutions in the formerly occupied Baltic countries—Estonia,
Latvia, and Lithuania—gained recognition for their successful use of culture to
protest collectively against the common Soviet oppressor in the late twentieth
century. Can economics explain the culture-driven revolutions of the Baltics
and of other nonviolent revolutions1 in Communist Europe? The old paradigm
of rational choice, of individual costs versus benets, shows why revolutions in
repressed societies are likely to fail but not why some succeed. Revolutionary
collective action in large groups is plagued by incentive problems causing
individuals to not participate and leadership to be absent (Olson, 1971; Tullock,
1974; Hardin, 1982). Using this approach, the literature shows how rebellious
groups have historically been able to overcome the incentive problems by
devising appropriate institutional solutions (Tilly; 1978; Lichbach, 1994; 1995;
Petersen, 1999; 2001; Leeson, 2010, Leeson & Boettke, 2009). Other, more
interdisciplinary approaches factor in the force of personal preferences or moral
values and use threshold analysis to explain momentous social uprisings (see
Granovetter, 1978; Kuran, 1989; 1991; 1995; Petersen, 1993). The literature
presents us with dozens of context-dependent solutions in the form of either
market exchanges or contractual arrangements in the communities involved,
or the formation of new governance structures (see Lichbach; 1994; 1995;
Petersen, 1993; 1999; 2001).
The biggest shortcoming of the standard rational-choice framework is that it
is unable to explain dynamic phenomena in society (North, 1990; 1997; 2005;
Denzau & North, 1994). What explains social change and revolutions, for
example? In an uncertain, dynamic, non-ergodic world, North asks,
1 For example, the 1989 civil rights movements in East Germany, and student protests
in the Velvet Revolution in former Czechoslovakia.
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Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
How well do we understand reality? How do beliefs get formed?
Whose beliefs matter and how do individual beliefs aggregate into
belief systems? How do they change? What is the relationship
between beliefs and institutions? How do institutions change? And
perhaps most fundamental of all, what is the essential nature of the
process [of economic change] itself? (North, 2005)
History reveals the key role of the indigenous Estonian epistemic community of
the early nineteenth century, represented by the members of the Estonian Learned
Society, and its role in discovering and disseminating the relevant knowledge
of the cultural commons in society. An alternative, entrepreneurial-institutional
approach to rationality complements the standard neoclassical framework and
helps explain what helped Estonians overcome the problems of revolution and
reinstate self-governance. The key is understanding the role of culture and the
entrepreneur-leaders who changed the culture in Estonian society.
In this paper, I rst argue that from a rational-choice perspective, culture can
be seen as an informal institution that increases the payoffs of participation and
the costs of nonparticipation in a revolutionary movement. To illustrate this
point, I investigate the recent historical case of Estonia’s Singing Revolution
in 1988 using a game-theoretic approach. Second, I take a step to explore the
role of cultural leaders as entrepreneurs in understanding the antecedents of
successful revolutions. From an entrepreneurship-augmented perspective, the
standard rationality assumptions in studying collective, nonmarket decision-
making must change from static, and only reactive, to dynamic and active-
entrepreneurial. The revised assumptions characterize alert and capable
individuals within a community (or a prospective community) who recognize
and act upon existing windows of opportunity for desired sociocultural change.
Within this entrepreneurial framework, individuals act creatively to advance
the frontier of beliefs, customs and models of governance in such a way as to
align any political changes with their true constitutional preferences. Working
within smaller cultural-epistemic communities, individuals as entrepreneurs-
leaders anticipate and devise solutions to help overcome future problems of
constitutional choice in society.
To illustrate how an entrepreneurial-institutional approach to social change
enriches our understanding of the successful Estonian revolution, I explore
Estonia’s system of ancient cultural beliefs. The ancient Estonian heroic epic
Kalevipoeg illustrates how cultural beliefs persisted. It contributed to Estonia’s
moment of National Awakening, the successful corresponding revolution, and
the struggle for independence. In a dynamic framework, the ancient-culture
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Olga Nicoara
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
curators acting as entrepreneurs facilitated social change manifested in a
cultural awakening.
2. The Estonian Singing Revolution: history, politics, culture
The Singing Revolution is the name given to a series of peaceful mass
demonstrations featuring spontaneous, pro-independence singing in Estonia
starting in 1987 that rst led to increased political protests against the Soviet
regime and later led Estonia to gain its independence from the Soviet Union
in 1991 and the last Russian troops to withdraw from Estonian territory in
1994. The Estonian singing demonstrations started during Glasnost, Mikhail
Gorbachev’s policy regime of freedom of speech and political expression, and
intensied in the summer of 1988, eventually culminating in over 300,0002
Estonians convening at the annual Song Festival in Tallinn to sing Estonian
national hymns and songs for independence that were strictly forbidden under
the Soviet regime.
2.1 Estonia’s singing culture
Singing, particularly as part of large song festivals, has been a dening
characteristic of Estonia’s cultural identity since the late 1800s, before the
period of Russication, and before the Soviet era (Gross, 2002; Raun, 2001).
Indeed, the recounting of old stories and oral histories, including by singing
folkloric songs at annual festivals, as well as within familial circles, was one
of the means by which Estonians preserved their cultural memory of an unique
culture and national identity “awake” throughout the 50 years of Soviet ruling
(Rakfeldt, 2015; Gross, 2002).
The tradition of singing popular religious and patriotic Estonian songs thrives as a
result of a large portion of the younger population practicing singing generation after
generation. According to Statistics Estonia, Estonia’s ofcial statistics database, the
most active practitioners of amateur cultural activities, predominantly concerning
folk culture, in 2010, were youth, aged 10 to 24, for whom choir singing was the
most popular activity. According to the Time Use Survey by Statistics Estonia, 83
percent of such youths spent their leisure time in some ‘amateur cultural activity’
or ‘folk culture’ in 2010. Among people aged 25 to 64, 74 percent spent their time
2 Around a quarter of the entire Estonian population in 1989 (1,565,662 Est. Statistics
Estonia).
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Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
in those activities; among persons aged 65 or older, the proportion was 56 percent.
A tradition that has persisted to the present day, Estonia’s culture of singing
goes back to at least the 1860s, the rule of the Russian Empire, when Estonian
journalist and poet Johann Voldemar Jannsen rst established the famous
Estonian Song Festival, Laulupidu, in Tartu, 1969. He also wrote the lyrics
of “Mu isamaa, mu õnn ja rõõm” [My fatherland, my happiness and joy], a
popular song later adopted as the national anthem of Estonia. For composing the
national anthem and establishing the annual Song Festival, Jannsen is credited
with helping revive the Estonian National Awakening that fueled Estonia’s
singing culture that ultimately led to the Singing Revolution and subsequent
independence from Moscow.
The Estonian National Awakening, the period between 1860s and 1880s, is well
known for its strong movement of coordinated initiatives of cultural activism
to establish a unied Estonian national and cultural identity (Raun, 2001;
Iwaskiw et al., 1996). The movement as a whole aimed to start and strengthen
the following intellectual and cultural foci: the Estonian Alexander School,
the Learned Estonian Society (LES)3, and the Estonian song festivals (Raun,
2001, p. 59). The LES Baltic-German intellectuals are credited for uncovering
Estonia’s ancient cultural roots. The purpose of the LES was to uncover, develop,
and disseminate knowledge of Estonia’s history and culture from antiquity to the
present, including its language, literature, and folklore. The society published its
works in yearbooks, bibliographies, and proceedings.
The leading gures of the LES were Friedrich Robert Faehlmann, Friedrich
Reinhold Kreutzwald, Alexander Friedrich von Hueck, and Dietrich Heinrich
Jürgenson. Faehlmann, an Estonian physician, folklore expert, and linguistic
scholar, for example, took key steps toward restoring the Estonian ancient
cultural heritage. He was the rst to research Estonia’s ancient folklore and
to compile Estonia’s ancient heroic epic Kalevipoeg [Kalev’s Son], the source
of stories and lyrics for Estonia’s singing tradition. Faehlmann died in 1850
at the age of 51, leaving behind “only bits and pieces of his ongoing efforts,”
according to Jaan Puhvel (2003), a comparative mythologist of Estonian
origin. Faehlmann’s death, coupled with the immediately preceding publication
of the Finnish Kalevala in 1849, prompted the Learned Estonian Society to
commission his close friend, Estonian poet Friedrich Kreutzwald, to complete
the literary task. As Puhvel notes, however, Kreutzwald’s task required more
3 English translation of the name of a well-known Estonian organization Õpetatud
Eesti Selts (abbr. ÕES), founded in 1838 which, in his book, Toivo Raun refers to as
the Society of Estonian Literati (Raun, 2001).
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Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
than restoring existing folkloric material because he had “only prose sagas
and interspersed lyric pieces” to work with (Puhvel, 2003). To complete the
epic, Kreutzwald creatively adapted the original lyrics by taking “considerable
liberties which detracted somewhat from the nal result”, and “only about
twelve percent is from original folksongs” as Puhvel (2003) documents. By
having the vision to reconstruct an ancient text into a new poem the population
could relate to and adopt as its own, Friedrich Kreutzwald could be viewed as
creator of sociocultural value, by leading and even reinventing Estonia’s cultural
foundations, a cultural leader or a “cultural entrepreneur” acting to bridge the
gap between ancient beliefs and modern socio-cultural demands in their society
(a term I elaborate on in Section 4.2).
2.2 Kalevipoeg: Estonia’s ancient epic narrative
of a society of free and responsible individuals
The rst version of Friedrich Kreutzwald’s heroic poem Kalevipoeg was
published in the Learned Estonian Society’s Proceedings between 1857 and
1861. The epic was rapidly disseminated among and adopted by the indigenous
population, and is considered to the present day “the fundamental Estonian
heroic epic and a reservoir for ancient, pre-Soviet indigenous values, norms,
and beliefs,” as documented by the Latvian sociologist Sergei Kruks (2003).
Kruks looks at Baltic literary epic works “as conscious attempts to invent a
tradition of self-identication in the framework of the emerging ‘nations’ in
the 19th century,” and provides a comparative analysis of the cultural messages
contained in the old texts of the Estonian poem Kalevipoeg by contrasting it with
its Latvian counterpart (Kruks, 2003). Starting from the assumption that the logic
of epic stories, as epic narratives, is to present us with contexts for interpreting
which values, actions, or behaviors are moral and socially acceptable, and which
ones are not, Kruks proceeds to read the verses of Kalevipoeg and derive the
central message encompassed therein. The Estonian narrative describes the rise
and growth of Kalevipoeg, the ancient Estonian hero, and how social norms
passed on through ancient wisdom helped shape the hero’s individual character
and morality in time.
I used Kruks (2003) as a secondary source in order to conduct a close reading
of the poem and to compile, cross-interpret, and categorize specic Estonian
personal, interpersonal, and governance values in Estonia as depicted in the
nation’s favorite sung folkloric poem (and the source for Estonia’s present
folkloric songs). In Table 1, I present a summary of my ndings.
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Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
The underlying message of Estonia’s oldest epic appears to be that self-
governance is a superior mode of social organization. Kalevipoeg encourages
personal responsibility, collective action, and risk-taking as essential for
development. The message in Estonia’s folklore is one of desire for a self-
governing society of equals, capable of socially responsible actions, learning
from mistakes, and self-actualization.
Table 1. Cultural messages of self-governance, responsibility, cooperation, and
entrepreneurialism in Kalevipoeg
Ancient Estonian beliefs, attitudes,
and governance preferences
Ancient Estonian text
An optimistic and constructive attitude toward failure (Kreutzwald, 1982,
p. 212; Song XVI)
Humility and knowledge accumulation (Kreutzwald, 1982,
p. 212; Song XVI)
Entrepreneurship as risk-taking (Kreutzwald, 1982,
p. 43; Song III)
The role of social feedback in good governance (Kreutzwald, 1982,
p. 200; Song XVI)
Conict resolution and cooperation through
communication: language and singing skills
(Kruks, 2003)
Responsibility for one’s own actions (Kreutzwald, 1982,
p. 115; Song IX)
Freedom of choice; hope for the future (Kreutzwald, 1982,
p. 250; Song XIX)
Responsible collective action (Kreutzwald, 1982,
p. 251; Song XIX)
A society of equal, capable, and responsible beings (Kreutzwald, 1982,
p. 251; Song XIX)
Source: Table with categories created by author’s interpretation based on Kalevipoeg lyrics
found in Kruks, 2003.
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Olga Nicoara
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
2.3 The cultural and political contexts of the Singing Revolution:
Perestroika,Glasnostandthetheoryofpreferencefalsication
in Soviet Estonia
Today Estonia is one of the most successful post-Communist reformers, along
with Poland and the Czech Republic. Several studies point to the role of culture
as a determinant of reform performance during the transition to democracy
and a market-based economy in formerly Communist countries of Central and
Eastern Europe in general, and the culture of singing in Estonia, in particular
(see Boettke & Nicoara, 2015; Lauristin & Vihalemm, 1997).
In transitional political economy, culture is seen as a transaction cost facing
economic and political reformers (Pejovich, 2003; Boettke et al., 2005).
Transitions in the interdependent legal and political systems are particularly
constrained by the indigenous cultures that tend to unravel in the aftermath
of a repressive regime in periods of newly introduced economic and political
freedom (Boettke et al., 2008; Eggertsson, 2005; Boettke, 1993). The policies
of Perestroika and Glasnost implemented by Gorbachev in the mid-1980s
led to the surfacing of the existing subculture, in the form of social unrest,
protests, and revolutions. Estonia’s case gives weight to Timur Kuran’s theory of
preference falsication. Kuran denes preference falsication as the deliberate
misrepresentation of one’s true beliefs or wants in the face of social and political
pressure (Kuran, 1995). Kuran models preference falsication in formerly
Communist societies under the Soviet regimes, indicating that in practice, Soviet
societies adhered to two different, parallel institutional systems: one formal and
militarily imposed, and one informal and self-enforced.
Preference falsication and the social practice of a form of cultural, unspoken
collective choice seem to have a basis in Estonia’s medieval cultural institutions.
Estonians believe patience is a weapon and caution a virtue: “Their hero is the
shrewd old barn keeper who sits by the re, waits, watches, and acts only when
the time is right” (see The Singing Revolution, 2007). Inherent in Estonians’
folkloric traditions is a common identity reecting the political preferences of
their ancient indigenous people. The Tallinn choir as a revolutionary instrument
provided Estonians with an opportunity to express their actual constitutional
preferences in a synchronized and anonymous way.
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Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
Figure 1. The relationship between formal and informal institutions in society
Source: Sautet, 2005, p. 5
To better appreciate the phenomenon of preference falsication in practice,
consider Sautet’s illustration (Fig. 2) of the relationship between the formal and
the informal dimensions of the relevant rules of the game, or institutions, and
the cost of enforcing them (Sautet, 2005).
3. Rational choice, game theory, and the static solution
to Estonia’s revolution
From a standard rational-choice perspective, the Singing Revolution is a
case in which the indigenous culture4 helped solve the typical problems of
collective action. The culture of singing played a role in increasing the payoffs
to individuals participating in spontaneous, mass anti-Soviet protests and in
the Singing Revolution. The pre-Soviet indigenous culture eliminated the
problems of participation and coordination, and legitimized the creation of a
liberal Estonian constitution during independence. The Estonians’ tradition of
singing lowered the transaction costs of mass singing during the Tallinn Song
Festival, creating a window of opportunity for participants to express their true
constitutional preferences. It helped overcome the participation problem—
the context of the singing arena fostering spontaneous singing and thereby
preserving the anonymity of the “rst mover”— and eliminated the rst-mover
4 I use Douglass North’s denition of culture as the set of informal constraints, cus-
toms, and norms we inherit from the past that inuence our actions in the present, at
both the individual and the societal levels. According to North, culture creates “path-
dependence” in the trajectory of the subsequent institutional and economic develop-
ments in society (North, 1990; 2005). I also look at culture as a set of “slow-moving
institution” as categorized by Gérard Roland (2008).
Formal Rules
(Costly to enforce)
Overlap:
Formal Rules = Informal
Norms
(Cheap to enforce)
Informal Norms
(Self-enforced)
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Olga Nicoara
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
problem by eliminating the necessity for a rst mover (the conductor was forced
to continue conducting by the Soviet authorities themselves). Moreover, the
festival arena preserved participants’ anonymity and their assurance of a tacit,
binding singing agreement.
Game theory can serve as a helpful heuristic in addressing why the Singing
Revolution took place. The use of game theory to complement a rational-choice
analysis of collective-action problems is especially popular in comparative
politics. The “n-person assurance game” (or “tipping game”), for example,
illustrates how an appropriate change in the structure of incentives leads to
the cooperative equilibrium in a prisoner’s dilemma (Petersen, 1993; 2001).
In the n-person assurance game, the underlying logic is that an individual will
act only if a certain “threshold” of other agents will act as well (Sen, 1967;
Schelling, 1960; Petersen, 1993). The “participation threshold” in the case of
a revolution is the percentage level of participation in a reference group that
triggers reciprocation among other individuals (Petersen, 1993). The n-person
assurance game has been used in the past to explain revolutions against
Communist regimes in Eastern Europe (Goldstone, 1994; Kuran, 1991; 1995;
Karklins & Petersen, 1993; Petersen, 2001).
Applied to Estonia’s nonviolent, culture-driven revolution, the assurance game
helps us illustrate the economic calculations by an individual choir singer
and how the cooperative equilibrium of the singing revolution was reached.
An individual choir singer’s expected payoff from obeying or disobeying the
Soviet rule that exclusively Soviet propaganda songs, mostly in Russian, would
be sung at the Tallinn Song Festival in 1988 (see The Singing Revolution,
2007) is expressed in the following equations. Let pE be the probability that
the other person sings in Estonian, F be the individual payoff if the rebellion is
successful, S be the payoff of remaining with the status quo under Soviet rule
(i.e., if the protest fails), and A be the payoff of being arrested (A > 0, so when
computing the expected payoff for an individual, we must subtract the term).
Because freedom is better than the status quo, I assume F > S > 0. Equation {1}
expresses a choir singer’s expected payoff of protesting by singing Estonian
along with his choir members. Equation {2} expresses his expected payoff of
not protesting (by singing Russian) when his fellow choir members protest.
The expected payoffs are
E(E) = pE · F − (1 − pE) · A {1}
and
E(R) = S, {2}
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Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
where E(E) is computed by considering the event in which the singing protest
succeeds (which occurs with probability pE and has a payoff of F) and the event
in which the rebellion fails (which occurs with probability 1 − pE and has a
payoff of −A).
Similarly, E(R) = S because if either of the two choir members does not sing in
Estonian, this immediately prevents the rebellion from succeeding (so the status
quo is maintained regardless of the behavior of the other choir member in this
simple, two-singers’ case).
Figure 2. The Tallinn Song Festival choir singers’ assurance game
The assurance game has two pure-strategy Nash equilibria: the mutual-protest
equilibrium, in which both choir members maximize their payoffs, and the
equilibrium in which both conform by singing Soviet propaganda songs and
neither improves his payoff existing before the opportunity to protest. Which
equilibrium prevails depends on the probability each choir member places on
what the other choir member chooses during the singing festival. Either individual
singer must therefore decide whether to protest or conform by computing the
probability, pE, that the other singer will protest. The computation this individual
must make is based on solving for pE the inequality E(E) ≥ E(R).5 The mutual-
protest equilibrium maximizes social welfare, and will take place if and only if
5 Because F > S > 0 and A > 0, this bound is well dened and is a reasonable bound for
the probability pE.
Choir singer A
Protest (sing in
Estonian/Estonian
songs)
Conform (sing in
Russian/Soviet
songs)
Choir singer B
Protest (sing in
Estonian/Estonian
songs)
F
F
S
A
Conform (sing in
Russian/Soviet
songs)
A
S
S
S
{3}
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Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
Pre-Soviet culture, in this assurance game, increases the level of participation
by other singers, and leads to the cooperative pure-strategy Nash equilibrium in
which the payoffs of the singing revolutionaries are maximized. Furthermore,
the freedom of speech and political expression provided by Glasnost decreased
the costs of revolutionary participation and leadership. Moreover, the use of
the Tallinn Festival Arena as a focal point solved the problems of collective
protest coordination, and the use of collective singing solved the problem of
achieving anonymity of the prime singer-protesters. The arena allowed more
revolutionaries to convene to anonymously protest. The conductor of the choir
could be considered the prime mover because his role in coordinating the
singing was crucial. Accounts tell us that even if the Soviets wished to use the
festival for Soviet propaganda, they were forced to allow the conductor to guide
the thousands of choir singers’ spontaneous, unied singing of patriotic and
religious Estonian songs, in essence an expression of opposition to the Soviet
regime and a clear demand for independence and change.
The problem with the rational-choice, game-theoretic explanation of the Singing
Revolution is that it is no explanation at all. By treating changes in culture, the
informal structure of beliefs, as exogenous, the framework remains static. It
only describes the equilibrium outcomes before and after the change. In our
case, it omits who in nineteenth-century Estonia made social change possible.
The standard rational-choice approach omits the human element in sociocultural
change.
4. A dynamic theory of sociocultural choice: the role of cultural
leadership as a form of cultural entrepreneurship in Estonia’s
Singing Revolution
A key lesson from the collapse of Communism that scholars in the eld of
transition-and-development economics seem to have underplayed is that
leadership (along with culture) matters in understanding the different outcomes
of transition reforms across Europe, Russia, and Central Asia (Boettke & Nicoara,
2015). The challenge remains in demonstrating how leadership, and culture,
matter for institutional change and development. Combining Israel Kirzner’s
dynamic theory of entrepreneurship (Kirzner, 1973) with Joseph Schumpeter’s
behavioral notion of entrepreneurs as bold leader-innovators (Schumpeter,
1950) and using the underlying framework of new institutional economics
can complement the narrow rational-choice framework to help us explain
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Cultural Leadership and Entrepreneurship as Antecedents
of Estonia’s Singing Revolution and Post-Communist Success
Baltic Journal of European Studies
Tallinn University of Technology (ISSN 2228-0588), Vol. 8, No. 2 (25)
dynamic sociocultural phenomena like the Estonian cultural awakening and the
subsequent Singing Revolution that led to Estonia’s independence. The way to
escape the comparative-statics trap is to reintroduce the active, entrepreneurial
human element into economic theory by taking recourse to entrepreneurial-
institutional individualism as opposed to conforming to an atomistic denition
of methodological individualism (Buchanan, 1999; Boettke, 1996).
The biggest shortcoming of the rationality assumption in orthodox neoclassical
economics is that it prevents explanations of various dynamic phenomena
in society (North, 1990; 2005; North & Denzau, 1994). Social change is a
black box for neoclassical theorists in Douglass North’s view because of the
elusive concept of culture as the set of informal rules of the game, or informal
institutions, inherited from the past, that may inuence individuals’ beliefs and
actions in the present (North, 1990). Starting from a more realistic assumption
an uncertain, constantly changing, dynamic world, North asks:
How well do we understand reality? How do beliefs get formed?
Whose beliefs matter and how do individual beliefs aggregate into
belief systems? How do they change? What is the relationship
between beliefs and institutions? How do institutions change? And
perhaps most fundamental of all, what is the essential nature of the
process [of economic change] itself? (North, 1990, p. 5).
Like many sociologists, North appears inclined to accept an evolutionary theory
of social change. Social norms, beliefs, values, and cultures change over time
by an evolutionary mechanism, through learning from and adapting in response
to experience (North, 2005). An evolutionary perspective on social change,
however, disarms even theorists, such as Douglass North, from exploring the
possibility and validity of alternative, dynamic theories. If evolution must take
its course rst in order for the prevailing societal system of beliefs to change,
then we must take social change as exogenous—that is, given. The culture of
a society, as dened by North, is “the cumulative structure of rules and norms
(and beliefs) that we inherit from the past that shape our present and inuence
our future” (North, 2005, p. 5, emphasis added).
In this paper, I argue that although an evolutionary theory of social change in
Estonia may perfectly hold, it omits the role of the Estonian cultural leader-
entrepreneurs, such as Friedrich Kreutzwald and other members of the LES, who
deliberately attempted to steer—and succeeded at steering—Estonia’s cultural
evolution toward re-actualizing ancient indigenous beliefs of self-governance
and responsibility. I therefore dene “cultural entrepreneurs” as individuals who
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discover and exploit opportunities to create value in society by satisfying an
existing, yet unaddressed, socio-cultural need. Cultural entrepreneurs persuade
others of the benets of a discovered cultural change. They bet that their
proposed course of socio-cultural change becomes adopted and translated into
tacit knowledge, cultural practices, and social capital over time. The period of
National Awakening was a period of opportunities for such cultural leadership
and cultural entrepreneurship, for it “was a period of conscious agitation by a
growing number of activists who sought to convince others of the merits of a
modern Estonian nation and culture” as delineated in by Toivo Raun (2001,
p. 57). The resulting socio-cultural changes later prompted corresponding
changes in Estonia’s formal institutions (i.e., legislation, constitution, etc.),
when Estonia gained independence from Moscow.
Elinor Ostrom and Michael McGinnis theorized about epistemic communities
as potential drivers of desirable institutional change in a group (McGinnis &
Ostrom, 1996). Estonia’s history provides us with an example of such drivers
of institutional change in the original epistemic communities formed around
the cultural leaders-entrepreneurs of the early nineteenth-century Estonia,
represented by the cultural activists, members of the Learned Estonian Society,
and their role in investigating, developing, and disseminating the relevant
knowledge of the cultural commons in Estonia. The cultural commons of the
Estonian society include the set of beliefs, norms, traditions, and forms of
cultural expression through folkloric poems, and singing practices traced back
to the medieval times.
An entrepreneurial-institutional approach to rationality complements the standard
neoclassical framework and can explain what helped Estonians to overcome the
problems of revolution and to reinstate self-governance. Cultural leadership is
a form of cultural entrepreneurship and cultural entrepreneurship is a form of
institutional entrepreneurship because culture is the bases of informal ‘rules of
the game’ or informal ‘institutions’ in society. Cultural leaders are, therefore,
cultural entrepreneurs and, ultimately, institutional entrepreneurs because of
their alertness to discovering and exploiting opportunities to advance the type
of informal institutions represented by underlying cultural norms and beliefs
about governance which they best envision to promote the personal autonomy
and well-being of individuals in their society, for generations to come.
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4.1 Institutional disequilibrium, entrepreneurial social change,
and revolution
From Paul Samuelson’s famous illustration of a production possibilities
frontier (PPF), we learn that a society’s choice of optimal production level on
its PPF varies with the “quantitative and qualitative resources of the economy
in question and the technological efciency with which they are used”
(Samuelson, 1948, p. 18). The more fundamental question in economics,
however, is what determines changes in the PPF itself. For a long time, the old
growth theorists’ biggest revelation was that growth is a result of exogenous
technological changes. Schumpeter’s entrepreneur-innovator solves steady
state by disrupting, from within, the existing developmental equilibrium
and pushing the frontier toward a new, higher state of allocative equilibrium
(Schumpeter, 1983 [1911]; Boettke & Coyne, 2009). Kirzner addressed the
Schumpeterian “long-run” type of entrepreneurship in his broader, more
encompassing analytical framework, in which he endows individuals only
with cognitive alertness to prot opportunities already existing in an out-
of-equilibrium world (Kirzner, 1973; 1979; 2000). How fast existing prot
opportunities are noticed and pursued in an economy is a function of the quality
of the institutional environment within which alert individuals-entrepreneurs
can make the most of their subjective knowledge, perceptions, talents, goals,
and endowments (Kirzner, 1973; 1979; Kirzner & Sautet, 2006). Theorists
in the new elds of comparative-institutional analysis and development have
worked in parallel to show that the extent of the technological change is a
function of the institutional makeup of a society; it is more efcient institutions
that correspond to an increase in the PPF, and change the corresponding set
of combinations of optimal production possibilities (Rosenberg, 1982; North,
1990; Romer, 1991; Djankov et al., 2003).
Extending the relevance of institutions in macroeconomics to the problems
of developed and developing nations, Simeon Djankov et al. (2003) devise a
framework for understanding social choice, in which an Institutional Possibility
Frontier (IPF) captures a society’s optimal choice of institutions as a tradeoff
between the extremes of dictatorship and disorder (Djankov et al., 2003, p. 3).
The problem in their framework is one of static choice, however. There is no
explanation for the adjustment between chosen social orders.
I argued that standard economic tools of analysis exclude the dynamic role of
entrepreneurs in coordinating markets and societies. The existence of multiple
equilibriums, as predicted by standard game-theoretic analysis, betrays a state
of de facto disequilibrium. Living under the military oppression of Communist
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dictatorships did not stop a subculture in its process of continuous change and
self-reinvention. Using the Kirznerian ideas of ‘opportunity discovery’ and
‘opportunity recognition’, found in the entrepreneurship and management literature
(Shane & Venkataraman, 2000; Shane, 2003), cultural leader-entrepreneurs
are arbitrageurs who discover an opportunity to create value by accelerating
sociocultural change or, what Oliver Williamson calls, the “embeddedness level
of society” (Williamson, 2000). Cultural entrepreneurship is entrepreneurship in
the realm of culture, consistent with a broader notion of entrepreneurship that
accounts for the realm of social choice (social entrepreneurship), the realm of
institutional choice (institutional entrepreneurship), and the realm of political
choice (political entrepreneurship) as exemplied by Boettke and Coyne (2003).
In Estonia’s case, the Learned Estonian Society made creative use of the ancient
Estonian beliefs to introduce and cultivate a common set of beliefs, norms,
traditions, and informal narratives. From a dynamic, entrepreneurial-institutional
perspective, cultural entrepreneurs discover and exploit on opportunities for
improved states of social coordination through their acts of cultural leadership
and persuasion, motivated by the discovery of an existing unmet public demand
for a common cultural-historical narrative. What likely motivates cultural
entrepreneurs is a desire for recognition and remembrance for their past acts of
leadership and foresight beneting generations to come.
4.2 Cultural leaders-entrepreneurs: the creative agents behind Estonia’s
period of cultural awakening
Toivo Raun, historian of Estonia and the Estonian people, attributes Estonia’s
national awakening to the Society of Estonian Literati (Raun, 2001) which is,
in fact, the well-known Learned Estonian Society (LES), founded in 1838.
The society started as a group of local and German Estophile enthusiasts and
promoters of educational literature in Estonia, but quickly expanded its cultural
aspirations to include popularizing written Estonian folklore and music and
establishing cultural centers, song festivals, and a museum in Tartu (Raun, 2001,
p. 75). Its efforts were later paralleled by an emergence of civic organizations
for the development of Estonian music, theater, and art. The rst all-Estonian
song festivals organized by LES members in 1869 in Tartu became a tradition
and started an indigenous musical culture in Estonia. Mass participation in
numerous song festivals grew rapidly over time, in particular as “antidotes to
the pessimism occasioned by Russication” in 1890 (Raun, 2001, p. 76) and the
later Soviet regime. The wide adoption and prevalence of the Estonian folklore
and culture of singing can be described as spontaneous, leading to an awakening
of shared sentiments of sociocultural and national identity.
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Can economics account for the cultural leadership and entrepreneurship of the
LES? Culture and entrepreneurship are two of the most elusive6 and neglected
concepts in social science in general, and in economics in particular. The
neglect in standard economic analysis of entrepreneurship as the driving human
element has been long acknowledged (Arrow, 1962; Baumol, 1968; Kirzner,
1973) and documented in the history of economic thought (Baumol, 1968;
Demsetz, 1983; Boettke & Prychitko, 1998). Numerous contributions have
been made toward either reintegrating the entrepreneur in economic theory
(Kirzner, 1973; 1983; Baumol, 1990; 2006) or creating a distinct scholarly eld
(Shane & Venkataraman, 2000; Davidsson, 2003). Similarly, the framework of
institutional analysis and development (Ostrom, 2005; Aligica & Boettke, 2009)
arose as a response to the neglect typical in economics and political science of
the role of deliberate, entrepreneurial action in solving problems of collective
action and social choice (Ostrom, 1965; Kuhnert, 2001). As the post–Cold War
literature has started to focus on a new approach that appreciates the role of
culture and informal social institutions in problems of economic development
and transition throughout economic history (North, 1990; Williamson, 2000;
Djankov et al., 2003; Boettke et al., 2005), the question of cultural dynamics
becomes ever more relevant. Is there room for an entrepreneurial dimension of
sociocultural change?
In this section, I use insights from the eld of entrepreneurship studies, on the
one hand, and the new, culture-based approach in economics, on the other hand,
to provide a more integrated framework for interpreting the Singing Revolution.
Mainly, I draw on the literature that focus on the equilibrating function of
entrepreneurship in society (Kirzner, 1973; Davidsson, 2003) and on “culture
as the set of informal rules of the game a society inherits from the past that guide
the behavior its individuals in the present” (North, 1990; 2005).
Kirzner (1973) denes entrepreneurship as an act of arbitrage through alertness
to, discovery of, and exploitation of existing prot opportunities in the market
setting: “The entrepreneurial element in the economic behavior of market
participants consists […] in their alertness to previously unnoticed changes
in circumstances which may make it possible to get far more in exchange for
whatever they have to offer than was hitherto possible” (Kirzner, 1973, pp. 15–
16). In the same conceptual framework, I dene cultural entrepreneurship as the
entrepreneurial act of alertness to, discovery, and exploitation of existing, yet
previously unnoticed, opportunities to create, advance and/or preserve valuable
6 William Baumol famously noted that “the entrepreneur is at the same time one of the
most intriguing and one of the most elusive characters in the cast that constitutes the
subject of economic analysis” (Baumol, 1968, p. 64).
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cultural commons in society. Following Santagata et al. (2011), in this paper, a
‘cultural commons’ is dened as a set of cultural resources, including language,
beliefs about group identity and governance, customs, traditions, and folklore
that is tacitly shared and/or practiced among the members of a community that
may include or give rise to certain social technologies. Social technologies are
tools or forms of private governance (see Eggertsson, 2010), and this paper
uses the Estonian singing tradition, which contributed to the Estonian Singing
Revolution and the subsequent breakaway from the Soviet ruling, as a case in
point.
The existence of cultural commons, to begin with, however, possesses the
dilemma of collective action at a higher level because cultural commons may
suffer from, yet again, a leadership problem, and free rider problem. Identifying,
promoting and maintaining the right set of cultural resources in society may
require a cultural leader-entrepreneur’s vision and deliberate action plan to
foster the most cohesive type of cultural commons.
The deliberate acts of cultural leadership in 1980s’ Estonia correspond to the
notion and manifestation of cultural entrepreneurship that helps us understand
how it was possible for Estonians to overcome the typical collective action
problems in society. Friedrich Kreutzwald’s role, in particular, shows how
Estonia’s cultural entrepreneurs were alert to discovering and exploiting
opportunities to bridge the gap between the forgotten, already-existing culture
(i.e., the ancient Estonian beliefs, folklore, singing practices and traditions, etc.)
and the growing demand for a well-dened national identity that was best put in
the lines of a member of the Learned Estonian Society who exclaimed, “Let’s
give Estonians what they want!” (Raun, 1991; 2001).
Cultural entrepreneurs are a category of institutional entrepreneurs.
Institutional entrepreneurs are defined in sociology as institutional
arbitrageurs by DiMaggio (1988, p. 14) who states that “New institutions
arise when organized actors with sufficient resources see in them an
opportunity to realize interests that they value highly.” While institutional
entrepreneurs may alter and/or innovate a broader category of institutions
or “rules of the game” in society, cultural entrepreneurs act to alter and/or
innovate elements of the cultural commons, including the folkloric heritage,
or the foundations of informal institutions, including beliefs, tacit norms,
traditions, etc. in society. I find that the most integrated understanding of
cultural entrepreneurship acknowledges that it serves the functions of three
distinct, yet interrelated, types of entrepreneurship: social entrepreneurship,
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Institutional
entrepreneur-
ship
Social
entrepreneur-
ship
Public
entrepreneurship
Cultural
entrepre-
neur-
ship
institutional entrepreneurship, and public entrepreneurship.7 I illustrate
cultural entrepreneurship at the intersection of social, institutional, and
public entrepreneurship in Figure 3.
Figure 3. Cultural entrepreneurship in relation to social, institutional, and public
entrepreneurship
The Estonian Kalevipoeg is an element of cultural heritage in the form of heroic
epic poetry that contributed to Estonia’s moment of cultural awakening and
the successful revolution as well as the independence struggle. In a dynamic
framework, Friedrich Kreutzwald and his predecessors represent the cultural
entrepreneurs, the driving forces who facilitated the Estonian moment of
sociocultural change or cultural awakening.
7 For the complete synthesis of the different types of entrepreneurship in society—
market, social, and institutional—in the literature, see Boettke and Coyne (2003).
For the use of the concept of “public entrepreneurship” (as differentiated from politi-
cal entrepreneurship), see Ostrom (1965). For a conceptualization of constitutional
entrepreneurship based on Ostrom’s concept of public entrepreneurship, see Kuhnert
(2001).
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5. Conclusion
The Singing Revolution was a spectacular case of successful collective action
of hundreds of thousands of Estonians singing folkloric, patriotic songs with
the goal of demanding independence from the Soviet Union in the late 1980s.
What made the revolution possible and successful? In this paper, I argue that
the possibility and the success of the Singing Revolution is attributable to three
factors: (1) the context of political freedom under Glasnost, (2) Estonia’s unied,
homogenous culture, and (3) Estonia’s pre-Soviet, cultural leadership or cultural
entrepreneurship.
First, the mid-1980s’ context of the rapid changes in the political rules of the
game, as formalized in Gorbachev’s Glasnost policy, favored revolutionary
movements across all the former Soviet republics, including Estonia. Glasnost
decreased individuals’ costs of rebelling against the Soviet regime because
it granted greater political freedom, including freedom of speech, without
withholding freedom to speak against authority.
Second, culture can serve as a powerful tool of group coordination, reducing
transaction costs, and turning the incentive balance in favor of active
participation. Estonia’s culture, preserved since pre-Soviet times, helped
Estonians solve the paradox of revolutions by means of folkloric practices
that served to foster a homogenous society, and to reinforce the shared beliefs
about the Estonian national identity, and preferences of political and economic
governance. Three of Estonia’s cultural specicities helped solve the paradox of
revolution: (a) the participants’ shared beliefs about a unied Estonian national
identity and political preference; (b) the participants’ shared (and also preferred)
way of voicing their political preference, by singing folkloric, patriotic songs
in Estonian; (c) the annual song festival, Laulupidu, held at the Tallinn Festival
Arena serving as a focal point both in time and in place.
Third, and perhaps most importantly, rather than stopping at Estonia’s culture
as an exogenous explanatory factor, to be taken for granted, I take a further step
to uncover the antecedents of such a favorable culture to begin with. Otherwise,
using ‘culture’ to explain the variation in post-Communist outcomes across
countries in transition, for example, is, in a way, no explanation at all. Using
historical and ethnographic research, I nd that Estonia’s culture beneted from
its pre-Soviet cultural leaders or cultural entrepreneurs. The role of key leaders-
entrepreneurs, from among the members of the Learned Estonian Society (LES),
stands out in understanding the revival, curation, and promotion of Estonia’s
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ancient cultural beliefs, in the form of folkloric poems and stories, from the
mid-nineteenth century to present day. The Estonian heroic epic Kalevipoeg is
an example of a piece of cultural heritage that contributed to Estonia’s moment
of cultural awakening and the reclaiming of autonomy in governance through
the successful Singing Revolution, and faster post-Communist growth and
institutional development of the country.
In essence, cultural leadership in Estonia’s Age of Cultural Awakening was a form
of cultural entrepreneurship driven by the creative vision of the members of the
LES. The entrepreneurial undertaking of Estonia’s cultural leaders is a historical
fact that calls for a switch to an entrepreneurial-institutional notion of rationality
in economics to explain why peaceful, culture-based revolutions, similar to
Estonia’s, might not be as paradoxical as standard neoclassical theory predicts.
In a dynamic framework of economic analysis, Kreutzwald, other members of
the LES, and their predecessors represent the cultural entrepreneurs, the driving
forces that promoted a culture of sung poetry and a sense of ancient belonging
for the Estonian people that ultimately facilitated the Estonian revolutionary
moment of socio-cultural change and a successful, post-Communist institutional
transition that carries on to the present day.
While understanding the role of Estonia’s singing culture can help us answer the
‘Which,’ ‘How?’ and ‘Why?’ questions of one of the biggest lessons leant from
the collapse of Communism, of ‘Institutions Matter,’ the role of cultural leaders-
entrepreneurs can help us illuminate the origins of and the keys to channeling
the existing culture towards socially desirable policy outcomes in the most
cooperative way possible. Institutional reformers or policy makers must work
alongside cultural leaders and interdisciplinary researchers to understand a
nation’s cultural specicities in order to design the most culturally-informed
and incentive-compatible reforms possible.
Finally, the paper provides a dynamic conceptual-analytical framework,
enhanced with insights from game theory, entrepreneurship studies and new
institutional economics, to investigate the role of cultural entrepreneurship and
leadership in collective decision-making as applicable to similar, non-violent
revolutions elsewhere in the world. This enhanced framework could also be
extended or applied to understanding the success or failures of collective efforts
in other areas, including disaster recovery, as well as humanitarian and foreign
aid initiatives in least developed countries.
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Acknowledgements
I thank Peter Boettke, Chris Coyne, Dragos Aligica, as well as the participants
at Colloquium on Market Institutions & Economic Processes at New York
University for their helpful comments and suggestions on earlier drafts of this
paper. In pursuing this research, I am also grateful for the nancial support from
the Mercatus Center at George Mason University.
Olga Nicoara is an assistant professor of economics in the Business and Economics
Department at Ursinus College in Pennsylvania, U.S.A. She received her Ph.D. and
M.A. degrees in economics from George Mason University (GMU) as well as her B.Sc.
in International Relations from the Academy of Economic Studies (ASE) in Bucharest,
Romania. Previously she was as a visiting assistant professor at Denison University, and
as Graduate Economics Instructor at GMU. Dr. Nicoara’s scholarship is in the economics
of the post-Communist transition, entrepreneurship, economic development, and cultural
economics.
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