This thesis explores the role played by nationalism in Estonia's transition to capitalism in the post-Soviet era and the way it continues to impact the Estonian economy. I hypothesize that nationalism was the key factor in this transition and that nationalism has placed a disproportionate economic burden on the resident ethnic Russians. First, I examine the history of Estonian nationalism. I examine the Estonian nationalist narrative from its beginning during the Livonian Crusade, the founding of Estonian nationalist thought in the late 1800s with a German model of nationalism, the conditions of the Soviet occupation, and the role of song festivals in Estonian nationalism. Second, I give a brief overview of the economic systems of Soviet and post-Soviet Estonia. Finally, I examine the impact of nationalism on the Estonian economy. To do this, I discuss the nature of nationalist economy, the presence of an ethno-national divide between the Estonians and Russians, and the impact of nationalist policies in citizenship, education, property rights, and geographical location. I find that there is a disproportionate difference in these areas between Estonians and ethnic Russians which affect the economy. I conclude by examining the problems and potential solutions to citizenship law, the use of neoliberalism in assimilation, and proposing a framework which could be used to examine disparities between differing groups in other economies. / Master of Arts