Deirdre McCloskey advances a relatively controversial theory about the cause of the industrial revolution. She argues that the institutional or technological factors usually put forwarded are insufficient — that in addition, a new conception of bourgeois dignity was required. While I personally tend to lean toward more conventional causes, it’s impossible to deny that McCloskey has a point. At a sui generis level, the prevailing ethic influences both what is literally possible (in terms of production possibility sets) and what is perceived to be possible — if not necessary — by the broader public.

A good case study supporting McCloskey’s thesis is the development of e-government in Estonia. Estonia has the world’s most digitized public service. It is truly remarkable: with more than 2500 e-government services available and counting, Estonia is slowly automating the majority of its public sector.

How did Estonia get here? Any inquiry into the nature and causes of its digital wealth of nations turns up a potpourri of institutional factors and theories. Perhaps the most important was the relative lack of legacy architecture following the collapse of the Soviet Union. Yet this was true of other baltic states as well. The accumulation of this and other institutional factors thus leaves me vaguely unsatisfied.

But perhaps, a la McCloskey, the missing ingredient in explaining their success is related to ethics. In this case, a hacker ethic, which motivated young civil servants to take on an ambitious and risky reform agenda, letting development guide policy rather than the other way around. Early successes captured the minds of the public, and suddenly broke open perceptions about what lay within the realm of possibility.

If this is accurate, it strongly cautions against superficial policy emulation without adjusting for the enthusiasm and competency of whoever is actually enacting the policy. And it also serves as a template for social reform movements more generally. Truly innovative reform requires not just visionary leaders or well read technocrats, but an energized core driven by a sense of possibility (and a willingness to “hack” the old regime) that has yet to penetrate the broader social imaginary.

Food for thought. You can read more on Estonia’s e-government in Tarmo Kalvet, Innovation: a factor explaining e-government success in Estonia