Rostow’s stages of

economic growth
Dr. Amit Kumar Sahoo
Introduction

• Walt Whitman Rostow OBE (October 7, 1916 – February 13, 2003) was an American economist,
professor, and political theorist who served as national security advisor to President of the United
States Lyndon B. Johnson from 1966 to 1969.
• Rostow is known for his book The Stages of Economic Growth: A Non-Communist Manifesto
(1960).
• His work was very controversial because he claimed that his theory was an alternative to Marx’s
theory of capitalism.
• If Marx’s theory is regarded as the banner of capitalism doomed, Rostow’s version
may be referred to as capitalism viable.
• He was an anti-communist and a staunch critic of communism.
• He suggested in his theory that an economy passed through a series of stages of economic growth.
• He suggested five stages of economic growth in which he tried to interpret the evolution of society
from an economic perspective.

Amit_Ravenshaw University
Amit_Ravenshaw University
The traditional society
• A traditional society is one of the simplest and primitive forms of social organisation.

• Society’s structure is developed within limited production function, based on Pre-

Newtonian science and technology and old Pre-Newtonian attitude to the physical world.

• Characteristics:
(a) Per Capita: Within a limited range of available technology there is a low ceiling per capita
output.
(b) Employment in Agriculture: A high proportion of workforce (75% or more) are devoted
in the production of agricultural goods. High proportion of resources are also devoted in the
agricultural section.
(c) Social Mobility: A hierarchical, hereditary, status-oriented social structure held down the
mobility of society at that time.
(d) Political Power: The centre of gravity of political power was localistic, region-bound and
primarily based on land ownership.

Amit_Ravenshaw University
Pre-Conditions for Take-Off

• It is that stage of economic growth in which People try to break free from the rigidities of
the traditional society and a scientific attitude—a quest for knowledge in short—a
questioning mid-set is very much visible in the changing face of the society.

• Rostow's precondition stage for sustained industrialization includes radical changes in

three nonindustrial sectors
a) increased transport investment to enlarge the market and production specialization

b) a revolution in agriculture, so that a growing urban population can be fed

c) an expansion of imports, including capital, financed perhaps by exporting some natural resources.

Amit_Ravenshaw University
 The Take-Off Stage
• Rostow's central historical stage is the takeoff, a decisive expansion occurring over 20 to 30
years, which radically transforms a country's economy and society.

• During this stage, barriers to steady growth are finally overcome, while forces making for
widespread economic progress dominate the society, so that growth becomes the normal
condition.

• Rostow indicates that three conditions must be satisfied for takeoff.

• Net investment as a percentage of net national product (NNP) increases sharply from 5 percent or less to over 10
percent.
• At least one substantial manufacturing sector grows rapidly.
• A political, social, and institutional framework quickly emerges to exploit expansion in the modern sectors.

• Events like the “Industrial Revolution” that was the brainchild of technological innovations in
Britain since 1760s or say, the “Manhattan Project (1940s)” that signaled the arrival of USA on
the world political scenario with a that are living examples of take-off stage as mentioned by
Rostow. Amit_Ravenshaw University
The Drive to Maturity
• After takeoff there follows the drive to maturity, a period of growth that is regular, expected, and self
sustained.
• It is a period when a society effectively applies the range of available modern technology to the bulk of its
resources; and growth becomes the normal mode of existence. Industries like heavy engineering, iron and
steel, chemicals, machine tools, agricultural implements, automobiles etc. take the driver’s seat.
• The economic characteristics of this stage are:
• Shift in the Occupational Distribution:
Due to Industrial Revolution many industries were established in Britain and the countries of. Western Europe, the
work force was shifted from agricultural sector to the manufacturing sector. The proportion of the
working force engaged in the agricultural sector went down to 20% or less.
• Shift in the Consumption Pattern:
A new type of workforce was created which was termed white-collar workers. They were mainly officials or managing
officials of a factory’s governing body. Due to high income their preferences were shifted to luxury goods. As a result
the consumption pattern of non-agricultural goods increased. This led to development of the existing
industries and also variation in tastes and preferences took place more rapidly in this period.
• Shift in the Consumption of Leading Sector:
The change in composition was observed to vary from country to country. The Swedish take-off was initiated by
timber exports, wood pulp and pasteboard products followed by the emergence of railways, hydropower, steel, and
animal husbandry and dairy products. The Russian take-off started with grain exports, followed by railways, iron
and steel, coal and engineering. Amit_Ravenshaw University
 The Age of High Mass Consumption
• From maturity the economy moves with growth to high mass consumption, the stage at which durable
consumer goods like radios, TV sets, automobiles, refrigerators, etc., life in the suburbs, college education
for one-third to one half the population came within reach.

• In addition the economy, through its political process, expresses willingness to allocate increased
resources to social welfare and security.

• This stage was defined in terms of shift in emphasis from problems of production to that of consumption.

• The symbols of this last stage, reached in the United States in the 1920s and in Western Europe in the
1950s, are the automobile, suburbanization, and innumerable durable consumer goods and gadgets.

Amit_Ravenshaw University
 CRITICISMS
• Rostow’s stages of growth theory have come in for severe criticism.
• Gunar Mydral has argued that there cannot be an inevitable sequence of events described as successive
stages of growth.
• According to him, economic growth is the result of certain economic policies adopted and not the other
way around.
• Meier argues that stages in the history of economic growth cannot be generalised from the development
experience of some European Countries as Rostow has done.
• To quote Meier, “stage-making approaches are misleading when they consider a linear conception of
history and imply that all economies tend to pass through the same series of stages. Although a particular
sequence may correspond broadly to the historical experience of some economies, no single sequence fits
the history of all countries. To maintain that every economy always follows the same course of
development with a common past and the same future is to over schematize the complex forces of
development, and to give the sequence of stages a generality that is unwarranted”.

Amit_Ravenshaw University