Rostow's Stages of Economic Growth

Topics: Investment, Economics, Economy Pages: 4 (985 words) Published: September 8, 2013
ROSTOW’S STAGES OF ECONOMIC DEVELOPMENT (ROSTOWIAN TAKE-OFF MODEL) Prof. W.W. Rostow (Prof.Walt Witchman Rostow) in his book entitled, “The Stages of Economic Growth” (published in 1960) has divided the whole process of economic growth into five stages. 1. The traditional society

2. The pre-conditions for take – off
3. The take – off
4. The derive to maturity
5. The age of high mass – consumption

1. The traditional society
A pre-industrial society is known as a traditional society. There are only primitive techniques of production. There is hardly any understanding of science and technology. Joint family system lack of vertical mobility, fatalistic attitude, rigidity, conservatism etc., are the basic characteristic features of a traditional society. Agriculture is the main occupation of the people.

2. The pre-conditions for take – off
This is a transitional era in which the pre-conditions for sustained growth are created. a) A Change in attitude of people towards science. b) Masses should realise that economic progress is possible and desirable c) Education should spread d) Development of entrepreneurs e) Growth of financial and credit institutions. f) Investment in transport and communications. g) Growth of political sovereignty h) Development of a centralised tax system. i) Construction of certain economic and social over heads like railroads and educational institutions. This society remains traditional along with modern activities side by side.

3. The take – off
Rostow has defined take-off as an interval in which old hurdles and resistances to steady growth are finally overcome. Growth becomes the normal condition of an economy.

Conditions of take-off
1) The rate of net investment should be 5 to 10 percent of national income. 2) The leading sectors of the economy should be developed. 3) Expansion of the modern sector. Rostow has expressed that the take-off period should be relatively short. The short period can show the character of...
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