January 22, 2010

Rostow’s Stages of Economic Growth - Indian Economy - Group2 - Chapter 5

W.W. Rostow, American economic historian described the

transformation of countries from underdevelopment to development in

terms of stages of growth. He is of the view that all countries must pass

through the following stages.


1) The traditional society ;

2) The transitional society ;

3)The take- off stage ;

4) The mature stage and ;

5) The age of high mass consumption


The traditional society will be custom-bound and tradition-oriented.

There will be economic backwardness. The poor countries of today are

good examples of traditional society. In short, the factors which are

essential for economic growth will be missing from such a society.


In the transitional society, the conditions for take-off stage will be

established. During this stage, the force of customs and traditions will

become less ; there will be economic motivation, and there will be

improvements in physical and social infrastructure. When once an

economy attains the take–off stage, there will be self – sustaining growth.

The take-off stage refers to a situation where an economy transforms

itself from a predominantly agricultural to a predominantly industrial

society. For an economy to attain the take-off stage, it must make an

annual investment equal to 20 – 25 percent of GDP mobilized from its

own savings. The take-off stage was made possible in some countries

by leading sectors like railways and defence. After the take- off stage,

when the economy attains self sustaining growth, it enters the mature

stage. During this stage, the government has to make some basic decisions.

As there will be abundant resources and goods, it has to divide whether

it has to use them for strengthening the nation into a strong and powerful

state militarily or to use the resources for improving the welfare of the

people. The final stage is the age of high mass consumption. During this

period, people will consume all kinds of goods especially durable goods

like cars on a mass scale.

Rostow's stages of economic growth are only broadly true. All nations

have not gone through the order in which he has described the stages.



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