Rostow's Stages of Economic Growth
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.
The traditional society ;
The transitional society ;
The take- off stage ;
The mature stage and ;
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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