Rostow’s Model and its Critical Analysis

THE FIVE STAGES OF ECONOMIC GROWTH

In 1960 ‘The Stages of Economic Growth’ by W. W. Rostow was published. It was
subtitled ‘A Non-Communist Manifesto’ because it offers a critique of Marxism in the
later chapters, but this is beyond the remit of our syllabus. We shall therefore concentrate
on the earlier chapters, which discuss the necessary conditions for economic
development, or as Rostow calls them; the preconditions for take-off and the take-off.
Rostow identifies and provides evidence for five stages of economic growth:

1. The Traditional Society

A traditional society has a large proportion of the population devoted to agriculture. The
level of technology is severely restricted or is ‘pre-Newtonian’. Examples include the
Chinese dynasties, the medieval civilisations of Europe, the Middle East and the
Mediterranean.

2. The Preconditions for Take-Off

Preconditions for take-off exist when there is a more stable political nation. There is greater exploitation of science,
and rising investment in transport and communication. Modern manufacturing appears.

3. The Take-Off
Agriculture is commercialised, new industries appear. Unused natural resources are
exploited, savings and investment rise and steady growth is achieved.
4. The Drive to Maturity

After a long period of growth (say 40 years), 10 to 20% of national income is invested and output continually
outstrips population growth. Goods that were previously imported are now produced at home. There is a shift away
from heavy engineering towards more complex processes. The economy can choose to produce anything it wants
even if the natural resources required are not actually present. Although 40 to 60 years is quoted, Rostow says that
this length of time may vary.

5. The Age of High Mass-Consumption

A large number of the population have moved beyond meeting their basic needs. Leading sectors of the economy are
producing durable goods. For example, the production of the Model T Ford signalled the start of this process in the
USA. Increased resources are allocated to social welfare and security.