China 'Short-term pain, long-term gain'

[Brad De Long]

>Might anyone out there have any info
>on the "short-term pain, long-term gain"
>argument? 
>
>That is, if you take the conventional argument at face value: just do what
>we (IMF/WB/Treas.) say today - privatize, export, etc.  It might be
>miserable for a while, but eventually you will reap the rewards and become
>developed.
>
>Is there any empirical evidence of countries witnessing the long-term gains
>that go along with development?  And what are those gains (if there were any
>at all).
>
>Quick point of clarification, I mean gains for non-elites.  Suharto and
>others did pretty well with the loans, but did the country/economy/people?
>
>Thanks,
>Aaron

Yes. Median wages and material standards of living in Indonesia today 
are three times what they were back in 1965. And the "convergence" of 
countries that adopted substantially U.S.-style mixed-economy 
social-democratic institutions in the immediate aftermath of World 
War II--the Marshall Plan aid recipients, Japan, plus Sweden, 
Finland, Canada, Australia, and New Zealand--has been very 
impressive...

Brad DeLong