Rostowian Model of Economic Development (5 Stages of Economic Development):-
The Rostowian model of economic development also known as the stages of growth model, is a theory proposed by Walt Whitman Rostow in his 1960 book, The Stages of Economic Growth: Non-Communist Manifesto. It postulates that all societies progress through five distinct stages of economic development:
Stage 1: The Traditional Society
Characterized by subsistence agriculture, limited technology, and rigid social structures.
Most people are employed in agriculture, with low productivity and living standards. Limited trade and commerce.
Stage 2: The Preconditions for Takeoff This stage sees the emergence of key factors that will enable economic takeoff, such as: Development of infrastructure: Transportation, communication, and energy systems. Institutional changes: Establishment of banks, property rights, and legal systems. Investment in education and healthcare: To improve the workforce and population health. Growth of population: Creates a larger domestic market and labor force.
Stage 3: The Takeoff Rapid economic growth driven by a leading sector, such as textiles, steel, or chemicals. Investment in new technologies and infrastructure. Urbanization and industrialization. Increase in savings and reinvestment.
Stage 4: The Drive to Maturity Diversification of the economy beyond the leading sector. Continued growth in manufacturing and services. Technological advancements and innovation. Rising living standards and consumption.
Stage 5: The Age of High Mass Consumption Widespread use of consumer goods and services. Advanced technological society with a focus on knowledge and information. Service sector becomes dominant. Criticisms of the Rostowian model: Ethnocentric: Critics argue that the model is based on Western experiences and does not account for the diversity of development paths. Oversimplified: The model presents a linear and deterministic view of development, which is not always accurate. Neglects external factors: The model does not adequately consider the role of external factors such as colonialism, trade, and foreign aid. Despite its limitations, the Rostowian model remains an influential framework for understanding economic development. It has been used to inform development policies in many countries around the world.
