The local government reforms of 1989 and 1993 were intended to establish a dual pattern of central-local relations in Estonia. The choice of this model was inspired and supported by the Nordic states. Although the legal framework for local government has remained untouched since 1993, the introduction of institutional mechanisms for strong local autonomy was not a success. The first part of this article seeks to identify the main factors that inhibited the launch of the new institutional model. These were a lack of strategic influence on national policy-making, poor cooperation from local authorities, and the diminishing role of countylevel governments and their subsequent liquidation. The second part of the article analyses the objectives and results of the local government amalgamation reform of 2017 as well as the theoretical and practical possibilities to re-establish central-local balances in Estonia. The analysis draws on institutional theory, which explains the effect of deep value patterns and concrete political choices on the institutionalization logic followed after the 1993 reform. It is concluded that the local elites retaining their old value patterns will downplay the effect of the 2017 reform.