Rostow modernization model

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Rostow modernization model

  1. 1. ROSTOW MODERNIZATION MODEL<br />Presented to,<br />Prof. Ravi B. Srivastava<br />Presented by,<br />Aastha Pallav<br />Aditya Jain<br />AlpeshBalar<br />Bhaumik Joshi<br />
  2. 2. FLOW OF PRESENTATION<br />INTRODUCTION<br />STAGES OF MODEL<br />CRITICISM<br />
  3. 3. INTRODUCTION<br /><ul><li>Rostow'smodel is one of the more structuralist models of economic growth, </li></ul> particularly in comparison with the backwardness model developed <br /> by Alexander Gerschenkron<br /><ul><li>Rostowbelieves that countries want to modernize as he describes </li></ul> modernization, and that society will assent to the materialistic norms of <br /> economic growth.<br />
  4. 4. STAGES OF MODEL<br />STAGE I- TRADITIONAL SOCIETY<br />Subsistence, barter, agriculture<br />STAGE II -TRANSITIONAL SOCIETY<br />Specialization, surpluses, infrastructure<br />STAGE III- TAKE OFF<br />Industrialization, growing investment, regional growth, political change<br />STAGE IV- DRIVE TO MATURITY<br />Diversification, innovation, less reliance on imports, investment<br />STAGE V- HIGH MASS CONSUMPTION<br />Consumer oriented, durable goods flourish, service sector becomes dominant<br />
  5. 5. STAGE I- TRADITIONAL SOCIETY<br /><ul><li> Minimal productivity
  6. 6. Few exchange transaction
  7. 7. Economic change/technological improvements are not sufficient to sustain </li></ul> any growth in per capita output, which is low<br />STAGE II- TRANSITIONAL SOCIETY<br /><ul><li> Society engages in secular education
  8. 8. Establishes banks and currency
  9. 9. Emerging entrepreneurial class
  10. 10. Concept of manufacturing emerges, with only a few factories developing </li></ul> at first.<br />
  11. 11. STAGE III- TAKE-OFF<br /><ul><li> Growth becomes the norm and improvements in production lead to the </li></ul> emergence of leading sectors. <br /><ul><li>Income rises across the board, and a new class of established entrepreneurs </li></ul> emerges.<br />STAGE IV- THE DRIVE TO MATURITY<br /><ul><li> Modern technology is fully adopted in all economic activity
  12. 12. New leading sectors emerge
  13. 13. Economy demonstrates technological and entrepreneurial skills to </li></ul> produce anything it chooses to,<br />
  14. 14. STAGE V- HIGH MASS CONSUMPTION<br /><ul><li> Leading sectors shift toward durable goods
  15. 15. Surge occurs in per capita income and increased allocation to social welfare </li></ul> programs.<br />
  16. 16. CRITICISM OF MODEL<br /><ul><li>Rostowis historical in the sense that the end result is known at the outset </li></ul> and is derived from the historical geography of a developed, bureaucratic <br /> society.<br /><ul><li>Rostowis mechanical in the sense that the underlying motor of change is </li></ul> not disclosed and therefore the stages become little more than a <br /> classificatory system based on data from developed countries.<br /><ul><li>His model is based on American and European history and defines the </li></ul> American norm of high mass consumption as integral to the economic <br /> development process of all industrialized societies.<br /><ul><li>His model assumes the inevitable adoption of Neoliberal trade policies </li></ul> which allow the manufacturing base of a given advanced polity to be <br /> relocated to lower-wage regions.<br />

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