Rostow Stages of Economic Growth

1. ROSTOW’S STAGES OF ECONOMIC GROWTH
BY
DR.R.SAROJINI
ASSISTANT PROFESSOR
DEPARTMENT OF ECONOMICS
GOVERNMENT ARTS COLLEGE
COIMBATORE
INTRODUCTION
*The Stages of Economic Growth was published in 1960
*This work is also entitled as “A Non Communist Manifesto”.
*His work was controversial-
because provides alternative- Karl Marx –Theory of Modern History.
*He aware the limitations of his theory.
*Still claimed- theory designed to tackle wide range of issues.
*He suggested five stages of economic growth
*Both tried to interpret evolution of society from an economic perspective
BASIS OF THEORY
*Issues raised in the theory
*Under what reasons did Traditional Agricultural Societies begin the process of their
modernization?
*When and how did regular growth come to be a built in future of each society.
*What are the forces drawn the process of sustained growth.
*What are social and physical features and of growth process may be descent.
*In which direction did the uniqueness of each society express itself at each stage?
*What forces have determined the relations between the more developed and less
developed area.
*Where component interest taking us.
*It is taking us to communism or the affluent society or the suborn nicely rounded out
social destructions.
ROSTOW’S BRIEFINGS
*He sought to explain the process of economic growth through historical perspective.
*Emphasized the necessity of dynamic and dis-aggregative theory of production.

2. *Keynesian and classical analysis are rigid and static.
*He elaborates certain leading sectors, early stages of revolution.
*Economic development with become essential sequence of stages.
*Wants to examine the sectoral structure of economies of the growth process.
THE FIVE STAGES OF ECONOMIC GROWTH
A. Traditional Society.
B. Pre conditions for Takeoff.
C. Take Off.
D. Drive to Maturity.
E. Age of High mass Consumption.
TRADITIONAL SOCIETY
*A Traditional society according to him , as one whose structure is developed within
limited production functions based on Pre Newtonian science and technology.
*Agriculture dominated society.
*Lack of science and technology.
*Systematic use of science and technology lacking.
*Economic changes could be made possible through more land can be brought under
cultivation.
*Pattern of trade and commerce can be including farm outputs.
*Scale and pattern of trade and commerce can be expanded by increase in agricultural
productivity.
PRE CONDITIONS TO TAKE OFF
*This is 2nd stage of Economic growth. *Pre condition for sustained growth created.
*Transitional era.
*Such conditions developed in Europe at the end of 15th century.
*End of medieval age and started of modern age.
*Four forces encouraged the takeoff
*The New Learning and Renaissance.
*The New Monarchy.
*The New World. Terra Incognita
*New Religion or Reformation.
*These forces leads to-
*Reasoning and skepticism in place of faith and authority.
*Brought an end of feudalism.
*Rise of nation state concept.

3. *Spirit of adventure leads to new discoveries and innovations.
*Rise of middle class.
*Rise of Elite class; new market centers, mercantile cities.
TAKE OFF
*Take off is the interval during which the are of investment increases in such away that
real out put per capita increases significantly.
*This initial increase carries with it radical changes in the techniques of production and
the disposition of the income flows.
Investment increases, rise per capita out put.
*Growth becomes normal condition. The traditional values, habits and an institutions
completely changes due course of modernization.
*Industrial revolution lasts foe two to three decades. Economic growth becomes
common and automatic phenomenon.
*Take off is initiated by a sharp stimulate either political or industrial revolution which
affects the economic and social institutions.
CONDITIONS FOR TAKE OFF
1.Increase in productive investment fro 5 % to %.
2. Development of leading industry or sector.
a. Primary growth sectors-exploitation and exploration of untapped resources.
b. Supplementary growth sectors- expansion of I and S industry.
c. Derived growth sectors- textile, growth takes place steadily.
Development of one or more substantial manufacturing sector with high growth rate.
The emergence of a suitable socio-political and institutional frame wok. Under which
the growth and expansion of modern sector becomes sustained
AGE OF HIGH MASS CONSUMPTION
*This stage refers to the period of contemporary comfort afforded in many Western
nations.
*Leading sectors shift towards the durable consumer goods and services.
*Real income per head rises significantly.
*Large number of persons gained command over consumption which transcended basic
foods, shelter, and clothing.
*Use of automobiles, electric powered household gadgets, luxurious goods increase.
*Structure of working force changed.
*In crease in urbanization.
*Skill oriented jobs .
*Allocation of resources for welfare of the society and environment concerns.

4. CRITICISM ON MODEL
*Prof. Cairns cross observes that economic historians emphasize continuity of historic
change but Rostow like to be tresses discontinuity .
*According to Higgins, economic historians are sceptical about the dates of take-off as
suggested by Rostow.
*The analysis of take-off does not take into account the degrees of backwardness
differences in historical heritage and starting time for development, various relevant
factors in underdeveloped countries. .
*The requirement off an investment rate to extend of the rate 10 % of the national
income of arbitrary there is no historical data to substantial a share rise in saving-
income ratio at the initial stage of economic growth the rise may be only gradual .
*Prof. Cairns does not agree with the Rostow’s idea on leading sector. There is no basis
for recognizing the leading sector. They seems to be no relationship between the
conception and the latter stage, Rostow thinks that the leading sectors must be
manufacturing .
*For take-off Rostow’ emphasizes the existence of a suitable institutional frame work.
Prof Cairns cross argue that the institutions may follow take-off but cannot be
presumed that to proceed it.