Rostows stages of economic growth

For the scope of this paper, development refers to economic growth that leads to increased standard of living.

Rostows stages of economic growth

This initial stage of traditional society signifies a primitive society having no access to modern science and technology. In this stage of a society output could be increasing through the expansion of land area under cultivation or through the discovery and spread of a new crop.

But the critical fact about this type of society is that there is limit to attainable output per head. This limit arises due to the absence of access to modern science and technology. This type of a society allocates a large proportion of its resources to agriculture and is characterised by a hierarchical social structure in which there is little possibility for vertical mobility.

The value system that prevails in such a society is what Rostow calls a long-run fatalism. People of these societies think that not much economic progress is possible for them and for their future generations.

Pre-Conditions or the Preparatory Stage: The covers a long period of a century or more during which the preconditions for take-off are established. These conditions mainly comprise fundamental changes in the social, political and economic fields; for example: India did some of these things in the First Five Year plan period The people start using modern science and technology for increasing productivity in both agriculture and industry.

Further, there is a change in the attitude of the people who start viewing the world where there are possibilities of future growth.

A new class of entrepreneurs emerges in the society who mobilise savings and undertake investment in new enterprises and bear risks and uncertainty. In the sphere of political organisation, it is during this stage that an effective centralised nation state starts emerging.

Thus in the stage of precondition for take-off Rostow views agriculture as performing three roles, first, agriculture must produce sufficient food-grains to meet the demand of growing population and of the workers who get employment in agriculture.

Secondly, increase in agricultural incomes would lead to the demand for industrial products and stimulate industrial investment. This is the crucial stage which covers a relatively brief period of two to three decades in which the economy transforms itself in such a way that economic growth subsequently takes place more or less automatically.

Thus, during the take-off stage, the desire to achieve economic growth to rasie the living standards dominates the society. Revolutionary changes occur in both agriculture and industry and productivity levels sharply increase. There is greater urbanisation and urban labour force increases.

In a relatively short period of a decade or two, both the basic structure of the economy and social and political structure is changed So that a self-sustaining growth rate can be maintained.

It is worth noting that in the opinion of Rostow, the rise of new elite i.

Rostow's Model of Stages of Economic Growth (With Criticism)

Period of Self-sustained Growth: This stage of economic growth occurs when the economy becomes mature and is capable of generating self-sustained growth.

The rates of saving and investment are of such a magnitude that economic development becomes automatic. Overall capital per head increases as the economy matures.

The structure of the economy changes increasingly. The initial key industries which sparked the take-off decelerate as diminishing returns set in. But the average rate of growth is maintained by a succession of new rapidly-growing sectors with a new set of leading sectors.

It is with both the problems and the cyclical movements of national income in such mature growing economies in this fourth stage that the bulk of modern theoretical economics is concerned.

Stage of Mass Consumption: In this stage of development per capita income of country rises to such a high level that consumption basket of the people increases beyond food, clothing and shelters to articles of comforts and luxuries on a mass scale.

New types of industries producing durable consumer goods come into existence which satisfies the wants for more consumption. These new industries producing durable consumer goods become the new leading sectors of economic growth.

Rostows stages of economic growth

Gunar Mydral has argued that there cannot an inevitable sequence of events described as successive stages of growth.

According to him, economic growth is the result of certain economic policies adopted and not the other way around. Likewise, Meier argues that stages in the history of economic growth cannot be generalised from the development experience of some European Countries as Rostow has done.

Although a particular sequence may correspond broadly to the historical experience of some economies, no single sequence fits the history of all countries.As a non-communist manifesto, W.

W. Rostow’s stages of economic growth (, ) is a foray into positioning the sweep of modern economic history under capitalism into neat and hopeful epochs.

Rostow’s version is an outstanding examples of continuity and evolution. Rostow's Stages of Growth Development Model The economist's 5 stages of economic growth and development are oft criticized. Evaluation of Rostow's Five Stages of Economic Growth Model There is overlap with the Harrod-Domar model i.e.

stages 2 and 3 require increased saving and investment; Stage 4 requires improvements in technology, which reduces the capital-output ratio. The Rostow's Stages of Economic Growth model is one of the liner economic models of historic economic growth.

It was presented by American economist Walt Whitman Rostow in as an.

Rostows stages of economic growth

Reasons for Studying Development Economics: Scope of Development Economics: Here we shall concentrate upon that what is the need behind studying development and what is to be studied in development economics.

Third World Communities are Changing — but into What?. In this discussion we will examine the experiences of Third World nations as they became "unhinged" and attempted to "emerge into self-sustained growth" (to use Rostow's colourful, optimistic phraseology); as they attempted to 'develop' into capitalist success stories over the past 60 years.

Linear growth theories