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The overviews of Rostow’s stages of Economic 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. The traditional society

2. The preconditions for take-off

3. The take-off

4. The drive to maturity

5. The age of high mass-consumption

 In addition to the five stages he had proposed in The Stages of Economic Growth in 1960, Rostow discussed the sixth stage beyond high mass consumption and called it “the search for quality” in 1971. Below is an outline of Rostow’s six stages of growth:

Overview

The 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.

The preconditions for take-off characterized by;

  • 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.

The take-off characterized by;

  • 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.

The drive to maturity characterized by;

  • Diversification of the industrial base; multiple industries expand and new ones take root quickly
  • Manufacturing shifts from investment-driven (capital goods) towards consumer durable and domestic consumption
  • Rapid development of transportation infrastructure.
  • Large-scale investment in social infrastructure (schools, universities, hospitals, etc.)

The age of mass-consumption characterized by;

  • The industrial base dominates the economy; the primary sector is of greatly diminished weight in the 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 country-sides to the cities)

Beyond consumption (The search for quality) characterized by;

  • 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.

References

  1. Rostow, W. W. (1960). “The Five Stages of Growth-A Summary” The Stages of Economic Growth: A Non-Communist Manifesto. Cambridge: Cambridge
  • Rostow, W. W. (1971). Politics and the Stages of Growth. Cambridge University Press. ISBN 9780521081979.
  • Rostow, W. W. (1962). The Stages of Economic Growth. London: Cambridge University Press. pp. 2, 38, 59.
  • Mishra, Puri (2010). Economics of Development and Planning—Theory and Practice. Himalaya Publishing House. pp. 127–136. ISBN 978-81- 8488-829-4.
  • Rostow emphasizes in Stages that “the stages of growth are an arbitrary and limited way of looking at the sequence of modern history: to dramatize not merely the uniformities in the sequence of modernization but also—and equally—the uniqueness of each nation’s experience.”

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