Rostow’s 5 Stages of Economic Growth

Rostow’s Stages of Economic Growth

A model developed by Walt Whitman Rostow in 1960 outlining five linear stages of economic development.

Traditional Society

The first stage in Rostow's model characterized by an agricultural economy, subsistence farming, and low productivity.

Preconditions for Take-off

The second stage where society embraces modern science, builds infrastructure, and investment rises.

The Take-off

The critical third stage where growth becomes self-sustained, with investment exceeding 10% of GDP.

Drive to Maturity

The fourth stage, lasting 40–60 years post-take-off, where technology spreads and the economy diversifies.

Age of High Mass Consumption

The fifth stage where the focus shifts to consumer goods, signifying widespread comfort and the emergence of a welfare state.

Criticism of Rostow's Model

The model is criticized for assuming linear progression, being Western-biased, and ignoring factors like colonialism and inequality.

Leading Sectors

Key sectors during the Take-off stage that grow rapidly and drive economic development.

Investment criteria in Take-off

Investment must cross 10% of GDP to achieve the self-sustained growth.

Examples of Traditional Society

Medieval Europe or pre-colonial India.

Example of Preconditions for Take-off

Britain in the early 18th century or India during British investment in infrastructure.

Example of Drive to Maturity

Japan after WWII, especially from the 1950s to the 1990s.

Investment in Age of High Mass Consumption

Investment rises above 20% of GDP as the economy focuses on consumer goods.