Rostow’s 5 Stages of Economic Growth

Rostow’s Stages of Economic Growth — Notes

🔍 Context of the Model

• Developed by Walt Whitman Rostow in 1960, in his book “The Stages of Economic Growth: A Non-Communist Manifesto”.

• Presented as an anti-communist development model during the Cold War to promote capitalist development.

• Based on Western industrialized countries' experience, especially USA and Europe.

• Model shows that economic development occurs in five linear stages.

📈 The Five Stages of Economic Growth

1. The Traditional Society

• Agricultural economy with subsistence farming and low productivity.

• Dominated by religion, military, or land-owning elites.

• Technological advancement is minimal (called Pre-Newtonian stage).

• Social status determined by family and caste, not merit.

• Political power held by traditional elites (e.g., landlords).

🧠 Example: Medieval Europe or pre-colonial India.

2. The Preconditions for Take-off

• Society begins to embrace modern science, build infrastructure, and invest.

• Development of transport, communication, and banking begins.

• Savings and investments rise to 5–10% of national income.

• Trade expands, and foreign influence often initiates change.

• Emergence of a progressive elite who promote innovation.

🧠 Example: Britain in early 18th century; India during British infrastructure investment era.

3. The Take-off

• Critical stage where growth becomes self-sustained.

• Investment crosses 10% of GDP.

• Key sectors ("leading sectors") grow rapidly, e.g., textiles, railways.

• Reinvestment becomes common; entrepreneurship rises.

• Development occurs in:

  • Primary growth sectors

  • Supplementary sectors

  • Derived sectors

🧠 Example: Britain (1783–1802), USA (1843–1860), India (1952).

4. Drive to Maturity

• Period of 40–60 years after take-off.

• Technology spreads across all sectors.

• Investment rises to 10–20% of GNP.

• Exports grow, and economy becomes diverse and self-reliant.

• Standard of living increases, and per capita income grows.

🧠 Example: Japan after WWII (1950s–1990s).

5. Age of High Mass Consumption

• Focus shifts from production to consumption.

• Rise in consumer goods industries (cars, electronics).

• Comfort and luxury consumption becomes widespread.

• Emergence of a welfare state (education, health, insurance).

• Investment rises above 20% of GDP.

🧠 Example: USA post-1950s, Western Europe post-Marshall Plan.

🧾 Criticisms of Rostow’s Model

• Assumes linear progression for all countries.

• Preconditions and stages may overlap or be skipped.

• Ignores role of colonialism, inequality, and external shocks.

• Fails to define clear metrics for classifying countries in stages.

• Western-biased: Based on experience of Anglo-European economies.

• Doesn't fit countries like USA or Canada who skipped "traditional society".

⏳ 1-Minute Revision Summary

• Rostow proposed that countries pass through five linear stages from traditional to high mass consumption.

• Development begins with agriculture, then shifts to industry and finally consumerism.

• Emphasizes investment, infrastructure, trade, and leadership.

• Critics argue it’s Western-centric, overly optimistic, and not universally applicable.

🧠 Flowchart: Rostow’s 5 Stages of Economic Growth

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[1. Traditional Society] ↓ - Subsistence agriculture - Religious dominance - Low technology [2. Preconditions for Take-off] ↓ - Infrastructure begins - Investment 5–10% - Trade expands [3. Take-off] ↓ - Investment > 10% - Leading sectors grow - Self-sustained growth begins [4. Drive to Maturity] ↓ - Technology spreads - Diverse economy - Export growth [5. High Mass Consumption] - Consumerism - Welfare state - Durable goods dominate

✅ Done! Would you like me to prepare flashcards or a comparison sheet with other growth models like Solow, Harrod-Domar, and Marx next?