Rostow Stages of Growth Theory

Rostow's stages of growth theory was published by American economist Walt Whitman Rostow in 1960. Rostow's stages of growth theory is one of the major historical model of economic growth.
According to Rostows economic progress is linear and historical process. He attempted to explain development through stages of economic progress. He distinguishes five stages of economic growth.
1. Traditional society
2. Precondition for take off
3. Take-off
4. Drive to maturity
5. The Age of high mass assumption
1. Traditional society
Traditional society is characterized by subsistence economy- subistence agriculture, almost wholly a " primary" sector economy. It has non-existence of trade . It has limited technology and lack of individual economic mobility.The existence of barter system of exchange in this system. People exchange goods for goods, there is no money for their own consumption. This is where society generally beigns before progressing towards the next stages of growth.There is no centralized nation or poltitical system .Wars, famines and epidemics like plague cause initially expanding populations to halt or shrinks, limiting the single greatest factor of production; manpower.
Some historical evidences.
* Pre- Newtonian era in England and Europe during 14th and 15th century.
* The stage existed in China during before the dynasties of China.
* The stages was relevant during and before mediaeval period of Europe.
The stage generally existed when there were Aristocracts and existence of feudal lords. In this stage investment share never exceeds 5% of total economic production. People are interested in spritual and religious pursuits only.
2. Precondition for take off
In the second stage of economic growth the economy undergoes a process of change for building up of condition for growth and take off. Rostow said that these changes in society and the economy had to be of fundamental nature in the social political structure and production techniques. The precondition for substained growth were created slowly in Britain and Western Europe from the beginning of the 16th centuries when the medieval age ended and modern age began. Precondition for take off encouraged 4 forces: Renaissance, New Monarchy,New world and new religion or reformation. There are three important dimension to this transition.
1. Firstly the shit from an agragian to an industrial or manufacturing society begins, albert slowly.
2. Secondly, trade and other commerical activities of the nation broaden the market's reach not only to neighbouring areas but also to far-flung regions, creating international markets.
3. Lastly, the surplus attained should not be wasted on the conspicuous consumption of the land owners or the state , but should be spent on the development of industries, infrastructure and thereby prepare for self-sustained growth of the economy later on.
Furthermore, agriculture becomes commercialized and mechanized via technology advancements; shift increasingly towards cash or export orinted crops and there is a growth of agricultural entrepreneurship.The strategic factor is that investment level should be above 5% of the national income.The dogmatic views are replaced by new ideas. Technological development can be seen in this stages due to which there is increased capital formation. In this stage individual social mobility begins. Widespread and enhanced investment in changes to the physical environment to expand production.
3. Take-off stage
Take-off stage is characterized by dynamic economic growth. Take off is the great watershed in the life of a society 'growth becomes normal condition'. The main feature of this stage is rapid , self- sustained growth. Take-off occurs when sector led growth becomes common and society is driven more by economic process than traditions. Value and interest of the traditional society makes decisive break through. Take-off period is supposed to be of 2-3 decade's. Per Rostow there are 3 main requirements for take-off:
* The rate of productive investment should rise from approximately 5% to over 10% of national income.
* The development of one or more substantial manufacturing sectors; with a high rate of growth.
* Existence of political, social and institutional frameworks to exploit the impulse to expansion in modernization.
Industrialisation becomes crucial phenomenon as it helps to prepare the basic structures for structural changes on massive scale. Take-off requires a large and sufficient amount of loanable funds for expansions of the industrial sector which generally come from two sectors:
* Shift in income flows by way of taxation, implementation of land reforms and various other fiscal measures.
* Re-investments of profit earned from foreign trade.
The ability of a country to make it through this stage depend on the following main factors.
* Introduction of new productive technologies and techniques in these sectors.
* Existence of enlarged, sustained Society increasing capacity to generate or earn enough capital to complete the take-off transition.
An example of a country in the take-off stage of development is Equatoria Guinea. It has the largest increases in GDP growth since 1980 and the rate of productive investment has risen from 5% to over 10% of income or product.
4. Drive to maturity
After take-off, there follows a long interval of substained growth known as the stage of drive to maturity. Rostow defines it "as the period when a society has effectively applied the range of modern technology to the bulk of its resources. Some 10-20% of the national income is steadily invested permitting output regularly to outstrip the increase in populations. The make up of the economy changes unceasingly as technique improves, new industries accelerate , older industries level off. The economy finds it place in the international economy;goods formely imported are producted at home; new requirement develop and new export commodities to match them. On comparing the dates of take-off and drive to maturity in the approximately 60 years.
The structural changes in the society during this stage are in three ways:
* work forces composition in agriculture's shifts from 75% of the working population to 20% . The workers acquire greater skill and their wages increase in real terms.
* the character of leadership changes significantly in the industries and a high degree of professionalism is introduced .
* environmental and health cost of industrialization is recognised and policy are thus made.
During this stage a country has to decide whether the industrial power and technology it has generated is to be used for the welfare of its people or to gain supremacy over others, or the world in too. A prime example of a country in the drive to maturity stage in South Africa. It is developing a world-class available energy, and sophisticated telecommunications facilities. Additionally, the commercial farm sector shed 140,000 jobs, a decline of roughly 20% in the eleven year period from 1988 tp 1998.
5. Age of high mass assumption
It refers to the period of the contempory comfort afforded by many western nations, where in consumers concentrate on durable goods and hardly remember the subsistence concerns of previous stage. In the age of high mass assumption, a society is able to choose between concentrating on military and security issues , on equality and welfare issues or on developing great luxuries for its upper class. There is a desire to develop an egalitarian society and measures are taken to reach this goal. Its offers great security's, leisure and comfort to working class. Attempt to enlarge its power and influence in international sphere. United States was first to reach this stage in 1920, followed by great Great Britain in 1930 and Japan in Western European nation in 1950s.
Criticisms

1. It is based towards western model of modernization.
2. The stages are not identifiable properly as the condition of the take-off and pre take-off stages are very similar and aslo overlap.
3. Rostow model doesnot apply to the Asian and the African countries as events in these countries are not justified in any stage of his model.