Austerity Worked for Latvia

Latvia, the poster child for austerity, has won an important distinction. It has been invited to join the Organization for Economic Cooperation and Development, the club of the world's most developed nations. Not bad for a country whose economy declined the most in Europe in 2009. This success also defies the predictions of the Nobel laureate economist Paul Krugman, who has dismissed Latvia's success.

The OECD is quite selective. Latvia will be its 35th member and only the second among post-Soviet nations (Estonia, another austerity champion, was invited in 2010). To get in, its policies had to be reviewed by 21 committees. Membership carries few benefits except being invited to contribute to the search for the best economic, environmental and social policies, but it is probably the highest form of recognition for a developing nation.