NORDEK : A Plan for Increased Nordic Economic Co-operation and Integration 1968-1970

For the first time the attempt of Denmark, Finland, Norway and Sweden to increase Nordic economic co-operation and integration (NORDEK 1968-1970) is analysed by using records from the four governments archives and interviews with central actors participating. A dominating argument has until now been that dynamics in Nordic economic integration is different from dynamics in European integration. This archive based study disproves the myth however of ideological Nordism and of short term political developments outside Norden as most important for the NORDEK initiative. The NORDEK initiative was actually more a consequence of a long term socioeconomic and socio-political path dependant process. The study also disproves the myth that the NORDEK plan was a political and ideological symbol without socioeconomic substance. The purpose with NORDEK was to create a better basis for generating economic growth and social welfare. The proposed NORDEK institutions were therefore developed to promote economic progress. The study finally shows that the NORDEK failure in 1970 was not a result of lacking economic rationale or incompatible economic interests. The failure was a result of a power struggle in Finnish domestic policy and lacking political will in the other Nordic countries to continue without Finland.

Essays on Illegal Activities, Institutions and Economic Growth

In public economics, two extremist views on the functions of a government compete: one emphasizes government working for the public interest to provide value for the citizens, while another regards government mainly as a workhorse for private interests. Moreover, as the sole legitimate authority, the government has the right to define the rules and laws as well as to enforce them. With respect to regulation, two extremes arise: from too little regulation to too much of it. If the government does not function or ceases to exist, the state falls into anarchy or chaos (Somalia). If it regulates too much, it will completely suffocate private activities, which might be considered extralegal (the former Soviet Union). In this thesis I scrutinize the government s interventionist policies and evaluate the question of how to best promote economic well-being. The first two essays assume that the government s policies promote illegal activity. The first paper evaluates the interaction between the government and the mafia, and pays attention to the law enforcement of underground production. We show that the revenue-maximizing government will always monitor the shadow economy, as monitoring contributes to the government s revenue. In general, both legal and illegal firms are hurt by the entry of the mafia. It is, however, plausible that legal firms might benefit by the entry of the mafia if it competes with the government. The second paper tackles the issue of the measurement of the size of the shadow economy. To formulate policies it is essential to know what drives illegal economic activity; is it the tax burden, excess regulation, corruption or a weak legal environment? In this paper we propose an additional explanation for tax evasion and shadow production, namely cultural factors as manifested by religion as determinants of tax morality. According to our findings, Catholic and Protestant countries do not differ in their tax morale. The third paper contributes to the literature discussing the role of the government in promoting economic and productivity growth. Our main result is that, given the complex relationship between economic growth and economic freedom, marketization has not necessarily been beneficial in terms of growth. The last paper builds on traditional growth literature and revisits the debate on convergence clubs arising from demographic transition. We provide new evidence against the idea that countries within a club would converge over time. Instead, we propose that since the demographic transition is a dynamic process, one can expect countries to enter the last regime of stable, modern growth in stages.

Essays on Economic Integration and Labour Demand

This dissertation consists of an introductory section and three essays investigating the effects of economic integration on labour demand by using theoretical models and by empirical analysis. The essays adopt an intra-industry trade approach to specify a theoretical framework of estimation for determining the effects of economic integration on employment. In all the essays the empirical aim is to explore the labour demand consequences of European integration. The first essay analyzes how labour-demand elasticities with own price have changed during the process of economic integration. As a theoretical result, intensified trade competition increases labour-demand elasticity, whereas better advantage of economies of scale decreases labour-demand elasticity by decreasing the elasticity of substitution between differentiated products. Furthermore, if integration gives rise to an increase in input-substitutability and/or outsourcing activities, labour demand will become more elastic. Using data from the manufacturing sector from 1975 to 2002, the empirical results provide support for the hypothesis that European integration has contributed to increased elasticities of total labour demand in Finland. The second essay analyzes how economic integration affects the impact of welfare poli-cies on employment. The essay considers the viability of financing the public sector, i.e. public consumption and social security expenses, by general labour taxation in an economy which has become more integrated into international product markets. The theoretical results of the second essay indicate that, as increased trade competition crowds out better economies of scale, it becomes more costly to maintain welfare systems financed by labour taxation. Using data from European countries for the years 1975 to 2004, the empirical results provide inconsistent evidence for the hypothesis that economic integration has contributed to the distortion effects of welfare policies on employment. The third essay analyzes the impact of profit sharing on employment as a way to introduce wage flexibility into the process of economic integration. The results of the essay suggest that, in theory, the effects of economic integration on the impact of profit sharing on employment clearly depend on a trade-off between intensified competition and better advantage of economies of scale. If product market competition increases, the ability of profit sharing to improve employment through economic integration increases with moderated wages. While, the economic integration associating with market power in turn decrease the possibilities of profit sharing with higher wages to improve employment. Using data from the manufacturing sector for the years 1996 to 2004, the empirical results show that profit-sharing has a positive impact on employment during the process of European integration, but can have ambiguous effects on the stability of employment in Finland.

Essays on Russia's Economic Transition

This study comprises an introductory section and three essays analysing Russia's economic transition from the early 1990s up to the present. The papers present a combination of both theoretical and empirical analysis on some of the key issues Russia has faced during its somewhat troublesome transformation from state-controlled command economy to market-based economy. The first essay analyses fiscal competition for mobile capital between identical regions in a transition country. A standard tax competition framework is extended to account for two features of a transition economy: the presence of two sectors, old and new, which differ in productivity; and a non-benevolent regional decision-maker. It is shown that in very early phase of transition, when the old sector clearly dominates, consumers in a transition economy may be better off in a competitive equilibrium. Decision-makers, on the other hand, will prefer to coordinate their fiscal policies. The second essay uses annual data for 1992-2003 to examine income dispersion and convergence across 76 Russian regions. Wide disparities in income levels have indeed emerged during the transition period. Dispersion has increased most among the initially better-off regions, whereas for the initially poorer regions no clear trend of divergence or convergence could be established. Further, some - albeit not highly robust - evidence was found of both unconditional and conditional convergence, especially among the initially richer regions. Finally, it is observed that there is much less evidence of convergence after the economic crisis of 1998. The third essay analyses industrial firms' engagement in provision of infrastructure services, such as heating, electricity and road maintenance. Using a unique dataset of 404 large and medium-sized industrial enterprises in 40 regions of Russia, the essay examines public infrastructure provision by Russian industrial enterprises. It is found that to a large degree engagement in infrastructure provision, as proxied by district heating production, is a Soviet legacy. Secondly, firms providing district heating to users outside their plant area are more likely to have close and multidimensional relations with the local public sector.

Essays on Finnish Economic Growth and Productivity, 1860-2005

This study examines Finnish economic growth. The key driver of economic growth was productivity. And the major engine of productivity growth was technology, especially the general purpose technologies (GPTs) electricity and ICT. A new GPT builds on previous knowledge, yet often in an uncertain, punctuated, fashion. Economic history, as well as the Finnish data analyzed in this study, teaches that growth is not a smooth process but is subject to episodes of sharp acceleration and deceleration which are associated with the arrival, diffusion and exhaustion of new general purpose technologies. These are technologies that affect the whole economy by transforming both household life and the ways in which firms conduct business. The findings of previous research, that Finnish economic growth exhibited late industrialisation and significant structural changes were corroborated by this study. Yet, it was not solely a story of manufacturing and structural change was more the effect of than the cause for economic growth. We offered an empirical resolution to the Artto-Pohjola paradox as we showed that a high rate of return on capital was combined with low capital productivity growth. This result is important in understanding Finnish economic growth 1975-90. The main contribution of this thesis was the growth accounting results on the impact of ICT on growth and productivity, as well as the comparison of electricity and ICT. It was shown that ICT s contribution to GDP growth was almost twice as large as electricity s contribution over comparable periods of time. Finland has thus been far more successful as an ICT producer than a producer of electricity. Unfortunately in the use of ICT the results were still more modest than for electricity. During the end of the period considered in this thesis, Finland switched from resource-based to ICT-based growth. However, given the large dependency on the ICT-producing sector, the ongoing outsourcing of ICT production to low wage countries provides a threat to productivity performance in the future. For a developed country only change is constant and history teaches us that it is likely that Finland is obliged to reorganize its economy once again in the digital era.

Analyzing changes in macro-level drivers of country-specific emissions : The role of consumption, technology and trade

Industrial ecology is an important field of sustainability science. It can be applied to study environmental problems in a policy relevant manner. Industrial ecology uses ecosystem analogy; it aims at closing the loop of materials and substances and at the same time reducing resource consumption and environmental emissions. Emissions from human activities are related to human interference in material cycles. Carbon (C), nitrogen (N) and phosphorus (P) are essential elements for all living organisms, but in excess have negative environmental impacts, such as climate change (CO2, CH4 N2O), acidification (NOx) and eutrophication (N, P). Several indirect macro-level drivers affect emissions change. Population and affluence (GDP/capita) often act as upward drivers for emissions. Technology, as emissions per service used, and consumption, as economic intensity of use, may act as drivers resulting in a reduction in emissions. In addition, the development of country-specific emissions is affected by international trade. The aim of this study was to analyse changes in emissions as affected by macro-level drivers in different European case studies. ImPACT decomposition analysis (IPAT identity) was applied as a method in papers I III. The macro-level perspective was applied to evaluate CO2 emission reduction targets (paper II) and the sharing of greenhouse gas emission reduction targets (paper IV) in the European Union (EU27) up to the year 2020. Data for the study were mainly gathered from official statistics. In all cases, the results were discussed from an environmental policy perspective. The development of nitrogen oxide (NOx) emissions was analysed in the Finnish energy sector during a long time period, 1950 2003 (paper I). Finnish emissions of NOx began to decrease in the 1980s as the progress in technology in terms of NOx/energy curbed the impact of the growth in affluence and population. Carbon dioxide (CO2) emissions related to energy use during 1993 2004 (paper II) were analysed by country and region within the European Union. Considering energy-based CO2 emissions in the European Union, dematerialization and decarbonisation did occur, but not sufficiently to offset population growth and the rapidly increasing affluence during 1993 2004. The development of nitrogen and phosphorus load from aquaculture in relation to salmonid consumption in Finland during 1980 2007 was examined, including international trade in the analysis (paper III). A regional environmental issue, eutrophication of the Baltic Sea, and a marginal, yet locally important source of nutrients was used as a case. Nutrient emissions from Finnish aquaculture decreased from the 1990s onwards: although population, affluence and salmonid consumption steadily increased, aquaculture technology improved and the relative share of imported salmonids increased. According to the sustainability challenge in industrial ecology, the environmental impact of the growing population size and affluence should be compensated by improvements in technology (emissions/service used) and with dematerialisation. In the studied cases, the emission intensity of energy production could be lowered for NOx by cleaning the exhaust gases. Reorganization of the structure of energy production as well as technological innovations will be essential in lowering the emissions of both CO2 and NOx. Regarding the intensity of energy use, making the combustion of fuels more efficient and reducing energy use are essential. In reducing nutrient emissions from Finnish aquaculture to the Baltic Sea (paper III) through technology, limits of biological and physical properties of cultured fish, among others, will eventually be faced. Regarding consumption, salmonids are preferred to many other protein sources. Regarding trade, increasing the proportion of imports will outsource the impacts. Besides improving technology and dematerialization, other viewpoints may also be needed. Reducing the total amount of nutrients cycling in energy systems and eventually contributing to NOx emissions needs to be emphasized. Considering aquaculture emissions, nutrient cycles can be partly closed through using local fish as feed replacing imported feed. In particular, the reduction of CO2 emissions in the future is a very challenging task when considering the necessary rates of dematerialisation and decarbonisation (paper II). Climate change mitigation may have to focus on other greenhouse gases than CO2 and on the potential role of biomass as a carbon sink, among others. The global population is growing and scaling up the environmental impact. Population issues and growing affluence must be considered when discussing emission reductions. Climate policy has only very recently had an influence on emissions, and strong actions are now called for climate change mitigation. Environmental policies in general must cover all the regions related to production and impacts in order to avoid outsourcing of emissions and leakage effects. The macro-level drivers affecting changes in emissions can be identified with the ImPACT framework. Statistics for generally known macro-indicators are currently relatively well available for different countries, and the method is transparent. In the papers included in this study, a similar method was successfully applied in different types of case studies. Using transparent macro-level figures and a simple top-down approach are also appropriate in evaluating and setting international emission reduction targets, as demonstrated in papers II and IV. The projected rates of population and affluence growth are especially worth consideration in setting targets. However, sensitivities in calculations must be carefully acknowledged. In the basic form of the ImPACT model, the economic intensity of consumption and emission intensity of use are included. In seeking to examine consumption but also international trade in more detail, imports were included in paper III. This example demonstrates well how outsourcing of production influences domestic emissions. Country-specific production-based emissions have often been used in similar decomposition analyses. Nevertheless, trade-related issues must not be ignored.

Cancer incidence, mortality, and pregnancy outcome among women treated for cervical intraepithelial neoplasia

Cervical cancer develops through precursor lesions, i.e. cervical intraepithelialneoplasms (CIN). These can be detected and treated before progression to invasive cancer. The major risk factor for developing cervical cancer or CIN is persistent or recurrent infection with high-risk human papilloma virus (hrHPV). Other associated risk factors include low socioeconomic status, smoking, sexually transmitted infections, and high number of sexual partners, and these risk factors can predispose to some other cancers, excess mortality, and reproductive health complications as well. The aim was to study long-term cancer incidence, mortality, and reproductive health outcomes among women treated for CIN. Based on the results, we could evaluate the efficacy and safety of CIN treatment practices and estimate the role of the risk factors of CIN patients for cancer incidence, mortality, and reproductive health. We collected a cohort of 7 599 women treated for CIN at Helsinki University Central Hospital from 1974 to 2001. Information about their cancer incidence, cause of death, birth of children and other reproductive endpoints, and socio-economic status were gathered through registerlinkages to the Finnish Cancer Registry, Finnish Population Registry, and Statistics Finland. Depending on the endpoints in question, the women treated were compared to the general population, to themselves, or to an age- and municipality-matched reference cohort. Cervical cancer incidence was increased after treatment of CIN for at least 20 years, regardless of the grade of histology at treatment. Compared to all of the colposcopically guided methods, cold knife conization (CKC) was the least effective method of treatment in terms of later CIN 3 or cervical cancer incidence. In addition to cervical cancer, incidence of other HPV-related anogenital cancers was increased among those treated, as was the incidence of lung cancer and other smoking-related cancers. Mortality from cervical cancer among the women treated was not statistically significantly elevated, and after adjustment for socio-economic status, the hazard ratio (HR) was 1.0. In fact, the excess mortality among those treated was mainly due to increased mortality from other cancers, especially from lung cancer. In terms of post-treatment fertility, the CIN treatments seem to be safe: The women had more deliveries, and their incidence of pregnancy was similar before and after treatment. Incidence of extra-uterine pregnancies and induced abortions was elevated among the treated both before and after treatment. Thus this elevation did not occur because they were treated rather to a great extent was due to the other known risk factors these women had in excess, i.e. sexually transmitted infections. The purpose of any cancer preventive activity is to reduce cancer incidence and mortality. In Finland, cervical cancer is a rare disease and death from it even rarer, mostly due to the effective screening program. Despite this, the women treated are at increased risk for cancer; not just for cervical cancer. They must be followed up carefully and for a long period of time; general health education, especially cessation of smoking, is crucial in the management process, as well as interventions towards proper use of birth control such as condoms.

Monimuotoisuus ja esteettömyys : Näkövammaisten asiantuntijoiden työelämäkokemuksia

The purpose of this study is to analyse education, employment, and work-life experiences of visually impaired persons in expert jobs. The empirical data consists of 30 thematic interviews (24 visually impaired persons, 1 family-member of a visually impaired person, 5 persons working with diversity issues), of supplementary articles, and of statistics on the socio-economic status of the visually impaired. The interviewees experiences of education and employment have been analysed by a qualitative method. The analysis has been deepened by reflecting it against the recent discussion on the concept of diversity. The author s methodological choice as a disability researcher has been to treat the interviewees as co-researchers rather than objects of research. Accessibility in its different forms is a prerequisite of diversity in the workplace, and this study examines what kind of accessibility is required by visually impaired professionals. Access to working life depends on the attitudes prejudices and expectations that society has towards a minority group. Social accessibility is connected with internal relationships in the workplace, and achieving social accessibility is a bilateral process. Information technology has revolutionised the visually impaired people s possibilities of accessing information and performing expert tasks. Accessible environment, good mobility skills, and transportation services enable visually impaired employees to get to their workplaces and to navigate there with ease. Integration has raised the level of education and widened the selection of career options for the visually impaired. However, even visually impaired people with academic degrees often need employment support services. Visually impaired professionals are mainly employed in the public and third sector. Achieving diversity in the labour market is a multiactor process. Social support services are needed, as well as courage and readiness from employers to hire people with disabilities. The organisations of the visually impaired play an important role in affecting the attitudes and providing peer support. Visually impaired employees need good professional skills, blindness skills, and social courage, and they need to be comfortable with their disability. In the workplace, diversity may actualise as diverse ways of working: the work is done by using technical aids or other means of compensating for the lack of eyesight. When an employee must find compensatory solutions for disability-related limitations at work, this will also develop his/her problem-solving abilities. Key words: visually impaired, diversity, accessibility, working life

Diagnostic Tests Based on Quantile Residuals for Nonlinear Time Series Models

This thesis studies quantile residuals and uses different methodologies to develop test statistics that are applicable in evaluating linear and nonlinear time series models based on continuous distributions. Models based on mixtures of distributions are of special interest because it turns out that for those models traditional residuals, often referred to as Pearson's residuals, are not appropriate. As such models have become more and more popular in practice, especially with financial time series data there is a need for reliable diagnostic tools that can be used to evaluate them. The aim of the thesis is to show how such diagnostic tools can be obtained and used in model evaluation. The quantile residuals considered here are defined in such a way that, when the model is correctly specified and its parameters are consistently estimated, they are approximately independent with standard normal distribution. All the tests derived in the thesis are pure significance type tests and are theoretically sound in that they properly take the uncertainty caused by parameter estimation into account. -- In Chapter 2 a general framework based on the likelihood function and smooth functions of univariate quantile residuals is derived that can be used to obtain misspecification tests for various purposes. Three easy-to-use tests aimed at detecting non-normality, autocorrelation, and conditional heteroscedasticity in quantile residuals are formulated. It also turns out that these tests can be interpreted as Lagrange Multiplier or score tests so that they are asymptotically optimal against local alternatives. Chapter 3 extends the concept of quantile residuals to multivariate models. The framework of Chapter 2 is generalized and tests aimed at detecting non-normality, serial correlation, and conditional heteroscedasticity in multivariate quantile residuals are derived based on it. Score test interpretations are obtained for the serial correlation and conditional heteroscedasticity tests and in a rather restricted special case for the normality test. In Chapter 4 the tests are constructed using the empirical distribution function of quantile residuals. So-called Khmaladze s martingale transformation is applied in order to eliminate the uncertainty caused by parameter estimation. Various test statistics are considered so that critical bounds for histogram type plots as well as Quantile-Quantile and Probability-Probability type plots of quantile residuals are obtained. Chapters 2, 3, and 4 contain simulations and empirical examples which illustrate the finite sample size and power properties of the derived tests and also how the tests and related graphical tools based on residuals are applied in practice.

The Rocky Road of Social Sustainability : The Impact of Integrated Biodiversity Conservation and Development on the Local Realities in Ranomafana National Park, Madagascar

The objective of this study is to examine the social impacts of the integrated conservation and development project (ICDP) aimed at biodiversity conservation and local socio-economic development in the Ranomafana National Park (RNP), Madagascar. Furthermore, the study explores social sustainability and justice of the ICDP in Ranomafana. This ethnographically informed impact study uses of various field methods. The research material used consists of observation, interviews (key-person and focus group), school children's writings, official statistics and project documents. Fieldwork was conducted in three phases in 2001, 2002 and 2004 in twelve villages around the park, as well as in neighbouring areas of Ranomafana. However, four of those twelve villages were chosen for closer study. This study consists of five independent articles and a concluding chapter. Social impacts were studied through reproductive health indicators as well as a life security approach. Equity and distribution of benefits and drawbacks of ICDP were analysed and the actors related to the conservation in Ranomafana were identified. The children and adolescents' environmental views were also examined. The reproductive health indicators studied showed a poor state of reproductive health in the park area. Moreover, the existing social capital in the villages seemed to be fragmented due to economic difficulties that were partly caused by the conservation regulations. The ICDP in Ranomafana did not pay attention to the heterogeneity of the affected communities even though the local beneficiaries of the ICDP varied according to their ethnicity, living place, wealth, social position and gender. In addition, various conservation actors (local people in various groups, local authorities, tourist business owners, conservation NGOs and scientists) contest their interests over the forest, conservation and its related activities. This study corroborates the same type of evidence and conclusions discussed in other similar cases elsewhere: so called social conservation programmes still cannot meet the needs of the people living near the protected areas; on the contrary, they even have a reverse impact on the people's lives. A fundamental misunderstood assumption in the conservation process in Ranomafana was to consider the local people as a problem for biodiversity conservation. Major reasons for the failure of the ICDP in Ranomafana include a lack of local institutions that would have been able to communicate as equals with the conservation NGOs as well as to transfer the tradition of the authoritarian governance in conservation management together with the over-appreciation of scientific biodiversity, and lack of will to understand the local people's rights to use the forest for their livelihoods.

Joseph A. Schumpeter's Theory of Social and Economic Evolution : a Reconstruction and Critique

The book presents a reconstruction, interpretation and critical evaluation of the Schumpeterian theoretical approach to socio-economic change. The analysis focuses on the problem of social evolution, on the interpretation of the innovation process and business cycles and, finally, on Schumpeter s optimistic neglect of ecological-environmental conditions as possible factors influencing social-economic change. The author investigates how the Schumpeterian approach describes the process of social and economic evolution, and how the logic of transformations is described, explained and understood in the Schumpeterian theory. The material of the study includes Schumpeter s works written after 1925, a related part of the commentary literature on these works, and a selected part of the related literature on the innovation process, technological transformations and the problem of long waves. Concerning the period after 1925, the Schumpeterian oeuvre is conceived and analysed as a more or less homogenous corpus of texts. The book is divided into 9 chapters. Chapters 1-2 describe the research problems and methods. Chapter 3 is an effort to provide a systematic reconstruction of Schumpeter's ideas concerning social and economic evolution. Chapters 4 and 5 focus their analysis on the innovation process. In Chapters 6 and 7 Schumpeter's theory of business cycles is examined. Chapter 8 evaluates Schumpeter's views concerning his relative neglect of ecological-environmental conditions as possible factors influencing social-economic change. Finally, chapter 9 draws the main conclusions.

Not in all Walks of Life? : Social Differences in Suicide Mortality

In Finland, the suicide mortality trend has been decreasing during the last decade and a half, yet suicide was the fourth most common cause of death among both Finnish men and women aged 15 64 years in 2006. However, suicide does not occur equally among population sub-groups. Two notable social factors that position people at different risk of suicide are socioeconomic and employment status: those with low education, employed in manual occupations, having low income and those who are unemployed have been found to have an elevated suicide risk. The purpose of this study was to provide a systematic analysis of these social differences in suicide mortality in Finland. Besides studying socioeconomic trends and differences in suicide according to age and sex, different indicators for socioeconomic status were used simultaneously, taking account of their pathways and mutual associations while also paying attention to confounding and mediatory effects of living arrangements and employment status. Register data obtained from Statistics Finland were used in this study. In some analyses suicides were divided into two groups according to contributory causes of death: the first group consisted of suicide deaths that had alcohol intoxication as one of the contributory causes, and the other group is comprised of all other suicide deaths. Methods included Poisson and Cox regression models. Despite the decrease in suicide mortality trend, social differences still exist. Low occupation-based social class proved to be an important determinant of suicide risk among both men and women, but the strong independent effect of education on alcohol-associated suicide indicates that the roots of these differences are probably established in early adulthood when educational qualifications are obtained and health-behavioural patterns set. High relative suicide mortality among the unemployed during times of economic boom suggests that selective processes may be responsible for some of the employment status differences in suicide. However, long-term unemployment seems to have causal effects on suicide, which, especially among men, partly stem from low income. In conclusion, the results in this study suggest that education, occupation-based social class and employment status have causal effects on suicide risk, but to some extent selection into low education and unemployment are also involved in the explanations for excess suicide mortality among the socially deprived. It is also conceivable that alcohol use is to some extent behind social differences in suicide. In addition to those with low education, manual workers and the unemployed, young people, whose health-related behaviour is still to be adopted, would most probably benefit from suicide prevention programmes.

Drug cultures in Estonia : contexts, meanings and patterns of illicit drug use.

In Estonia, illicit drug use hardly existed before the social changes of the 1990s when, as a result of economic and cultural transformations, the country became part of a world order centred in the West. On the one hand, this development is due to the spread of international youth culture, which many young people have perceived as being associated with drugs; on the other hand, it results from the marginalisation of a part of the population. The empirical part of the study is based mostly on in-depth interviews with different drug users conducted during between 1998 and 2002. Complementary material includes the results of participant observations, interviews with key experts, and the results of previous quantitative studies and statistics. The young people who started experimenting with illicit drugs from the 1990s and onwards perceived them as a part of an attractive lifestyle - a Western lifestyle, a point which is worth stressing in the case of Estonia. Although the reasons for initiation into drug use were similar for the majority of young people, their drug use habits and the impact of the drug use on their lives began to differ. I argue that the potential pleasure and harm which might accompany drug use is offset by the meanings attached to drugs and the sanctions and rituals regulating drug use. In the study both recreational and problem use have been analysed from different aspects in seven articles. I have investigated different types of drug users: new bohemians, cannabis users, in whose case partying and restrictive drug use is positively connected to their lives and goals within established society; stimulant-using party people for whom drugs are a means of having fun but who do not have the same restrictive norms regulating their drug use as the former and who may get into trouble under certain conditions; and heroin users for whom the drug rapidly progressed from a means of having fun to an obligation due to addiction. The research results point at the importance not only of the drug itself and the socio-economic situation of the user, but also of the cultural and social context within which the drug is used. The latter may on occasions be a crucial factor in whether or not initial drug use eventually leads to addiction.