Model Answer
0 min readIntroduction
Walt Rostow’s Stages of Economic Growth model, proposed in his 1960 book *The Stages of Economic Growth: A Non-Communist Manifesto*, is a historical model of economic development. It posits that all countries pass through five distinct stages of economic growth, moving from a traditional, agrarian society to a modern, consumer-oriented one. This model gained prominence during the Cold War as an alternative to Marxist theories of development and offered a linear path for nations to achieve economic prosperity. Understanding this framework is crucial for analyzing the economic trajectories of various countries.
Rostow’s Stages of Economic Growth
Rostow’s model outlines five stages, each characterized by specific economic, social, and political conditions:
1. The Traditional Society
- Characterized by subsistence agriculture, limited technology, and a hierarchical social structure.
- Production is primarily for local use, with limited trade or economic specialization.
- Political power is often concentrated in the hands of landowners.
- Values are often rooted in tradition and fatalism.
- Example: Many feudal societies before the Industrial Revolution, parts of pre-colonial Africa.
2. The Preconditions for Take-Off
This stage involves the emergence of external demand for raw materials, leading to increased investment in infrastructure (transportation, communication).
- Development of a transportation infrastructure to facilitate trade.
- Growth of commercial agriculture and mining.
- Emergence of a national market.
- Increased savings and investment.
- Political stability and a more centralized government.
- Example: 19th-century Latin America exporting raw materials to Europe.
3. The Take-Off
This is the critical stage where rapid economic growth begins, driven by technological innovation and investment in key sectors.
- Rapid growth in a few leading sectors (e.g., textiles, railroads).
- Increased investment rates (reaching at least 10% of national income).
- Development of a more sophisticated financial system.
- Political and social institutions support economic growth.
- Example: Britain during the Industrial Revolution (late 18th and early 19th centuries), South Korea in the 1960s.
4. The Drive to Maturity
The economy diversifies, technology spreads, and investment increases across a wider range of industries.
- Diversification of the economy beyond the leading sectors.
- Technological innovation becomes more widespread.
- Increased investment in education and human capital.
- The economy becomes more integrated into the global economy.
- Example: Germany and France in the late 19th and early 20th centuries.
5. The Age of High Mass Consumption
This stage is characterized by high levels of consumer spending, durable goods, and a welfare state.
- High levels of consumer spending and disposable income.
- Dominance of the service sector.
- Widespread availability of consumer goods.
- Increased focus on social welfare and quality of life.
- Example: The United States, Western Europe, and Japan in the post-World War II era.
| Stage | Dominant Economic Activity | Social Characteristics |
|---|---|---|
| Traditional Society | Subsistence Agriculture | Hierarchical, Fatalistic |
| Preconditions for Take-Off | Raw Material Export | Emerging Infrastructure |
| Take-Off | Leading Sector Growth | Rapid Investment |
| Drive to Maturity | Diversification | Technological Advancement |
| Age of High Mass Consumption | Consumer Spending | Welfare State |
Conclusion
Rostow’s model, while influential, has faced criticism for its linear and deterministic nature, neglecting historical context and the role of external factors like colonialism. It also assumes a universal path to development, which doesn’t account for the diverse experiences of different nations. Despite these limitations, the model provides a useful framework for understanding the broad patterns of economic growth and the challenges faced by developing countries. It remains a significant contribution to development economics, prompting further research and refinement of development theories.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.