Rostow's stages of growth  

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Rostow's Stages of Economic Growth model is one of the major historical models of economic growth. It was published by American economist Walt Whitman Rostow in 1960. The model postulates that economic growth occurs in five basic stages, of varying length:

  1. Traditional society
  2. The Pre Conditions of take-off
  3. Take-off
  4. Drive to technological maturity
  5. High mass consumption

Rostow's model is one of the more structuralist models of economic growth, particularly in comparison with the "backwardness" model developed by Alexander Gerschenkron, although the two models are not mutually exclusive.

Rostow argued that economic take-off must initially be led by a few individual economic sectors. This belief echoes David Ricardo's comparative advantage thesis and criticizes Marxist revolutionaries' push for economic self-reliance in that it pushes for the "initial" development of only one or two sectors over the development of all sectors equally. This became one of the important concepts in the theory of modernization in social evolutionism.


Below is an outline of Rostow's Five Stages of Growth:

  • Traditional Society
    • characterized by subsistence agriculture or hunting and gathering; almost wholly a "primary" sector economy
    • limited technology
    • Some advancements and improvements to processes, but limited ability for economic growth because of the absence of modern technologies, lack of class or individual economic mobility, with stability prioritized and change seen negatively
    • This is where society generally begins before progressing towards the next stages of growth
    • No centralized nations or political systems.
  • Pre-conditions to "take-off"
    • External demand for raw materials initiates economic change.
    • Development of more productive, commercial agriculture and cash crops not consumed by producers and/or largely exported.
    • Widespread and enhanced investment in changes to the physical environment to expand production (i.e. irrigation, canals, ports)
    • Increasing spread of technology and advances in existing technologies
    • Changing social structure, with previous social equilibrium now in flux
    • Individual social mobility begins
    • Development of national identity and shared economic interests.
  • Take-off
    • Urbanization increases, industrialization proceeds, technological breakthroughs occur.
    • "Secondary" (goods-producing) sector expands and ratio of secondary vs. primary sectors in the economy shifts quickly towards secondary.
    • Textiles and apparel are usually the first "take-off" industry, as happened in Great Britain's classic "Industrial Revolution"
    • An Example of the Take-off phase is the Agriculture (Green) Revolution in the 1960s.
  • Drive to Maturity
    • Diversification of the industrial base; multiple industries expand and new ones take root quickly
    • Manufacturing shifts from investment-driven (capital goods) towards consumer durables and domestic consumption
    • Rapid development of transportation infrastructure.
    • Large-scale investment in social infrastructure (schools, universities, hospitals, etc.)
  • Age of Mass Consumption
    • the industrial base dominates the economy; the primary sector is of greatly diminished weight in economy and society
    • widespread and normative consumption of high-value consumer goods (e.g. automobiles)
    • consumers typically (if not universally), have disposable income, beyond all basic needs, for additional goods
    • Urban society (a movement away from rural countrysides to the cities)
  • Beyond consumption
    • age of diminishing relative marginal utility as well as an age for durable consumer goods
    • large families and Americans feel as if they were born into a society that has high economic security and high consumption
    • a stage where its merely speculation on whether there is further consumer diffusion or what the new generation will bring for growth
Rostow claimed that these stages of growth were designed to tackle a number of issues, some of which he identified himself, writing:
"Under what impulses did traditional, agricultural societies begin the process of their modernization? When and how did regular growth become a built-in feature of each society? What forces drove the process of sustained growth along and determined its contours? What common social and political features of the growth process may be discerned at each stage? What forces have determined relations between the more developed and less developed areas; and what relation if any did the relative sequence of growth bear to outbreak of war? And finally where is compound interest taking us? Is it taking us to communism; or to the affluent suburbs, nicely rounded out with social overhead capital; to destruction; to the moon; or where?"

See also

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