Report Rostow development theory

ROSTOW’s Stages of Growth Development

In partial completion of IR220- HRD @ the National Level

Prof. ROSA MERCADO

By Alfredo V. Primicias III



Prof. ROSA MERCADO


TOPICS:1. Who is Rostow?2. Stages of Growth Development3. Criticisms of the Model



Prof. ROSA MERCADO


• Walt Whitman Rostow (Oct. 1916- Feb. 2003)• Economist and Political theorist• Special Assistant to Pres. Johnson on National Security Affairs• Political Adviser to Pres. Kennedy• Shaped US Foreign Policy in SEA in 1960s• Advocate of Capitalism and Free Enterprise• Wrote “The Stages of Economic Growth: A Non- Communist Manifesto”

(1960)– the Rostovian Take-Off Model of Economic Growth• Considered as one of the more structuralist models of economic growth• Rostow’s model is part of the liberal school of economics

Source: http://en.wikipedia.org/wiki/Walt_Whitman_Rostow

http://en.wikipedia.org/wiki/Walt_Whitman_Rostow



Prof. ROSA MERCADO


What is it? A model of economic growth suggesting that all countries pass througha series of stages of development as their economies grow.

Ideologies date way back

WW2

World capitalism =

US leadership

European Colonialism

bit the historical dust

US & USSR opposed

‘European’ colonialism

Cold War US vs USSR3rd World



Prof. ROSA MERCADO




Prof. ROSA MERCADO


1. TRADITIONAL SOCIETY1. Dominated by an agricultural based

economy

2. Intensive labor and low levels oftrading

3. Population has no scientificperspective on the world andtechnology (Pre-Newtonian era)

4. Under developed economy

5. Slow economic growth

Economy is dominated bysubsistence activity where output isconsumed by producers rather thantraded

Trade is carried out by barter wheregoods are exchanged directly forother goods

Agriculture is the most importantindustry and production is laborintensive using only limitedquantities of capital



Prof. ROSA MERCADO


2. PRE- CONDITIONS FOR TAKE- OFF1. Shift from agrarian to industrial/

manufacturing society begins• Transition Stage

• Discoveries and inventions

• Development of transport system

2. Creation of international markets• Country advances to a complex

economy-- beginning of economydevelopment

3. Surplus of agricultural products

4. Pivotal role of Government

5. Spread of education & knowledge

Increased specialization generatessurpluses for trading

Emergence of a transportinfrastructure to support trade

Entrepreneurs emerge as incomes,savings and investment grow

External trade occursconcentrating on primary products



Prof. ROSA MERCADO


3. TAKE OFF1. Rapid and dynamic economic growth

• Transition of a traditional economy to amodern economy

• Increase in investment and per capitaoutput

• Growth of manufacturing sectors

2. Development in Political, Social andInstitutional Framework

3. Agriculture progressed tocommercial rather than subsistence

4. Group of entrepreneurs to pursueinnovation

Industrialization increases, withworkers switching from the agriculturalsector to the manufacturing sector

Economic transitions are accompaniedby the evolution of new political andsocial institutions that support theindustrialization

Growth is self-sustaining as investmentleads to increasing incomes in turngenerating more savings to financefurther investment

Country Take- Off Period

Great Britatin 1783- 1802

Russia 1890- 1914

US 1843-1860

Germany 1850-1873

Canada 1896- 1914

China 1952-

India 1952



Prof. ROSA MERCADO


4. DRIVE TO MATURITYROSTOW: “period when society has

effectively applied the range of modern

technology to its resources”

1. Result of the Take- Off Stage• Old and New Industries

• Standards of living rise

• Use of technology increases

2. More amount of goods are produced

3. National economy grows anddiversifies

4. Increased percentage of nation’swealth- invested into developing itseconomy

Economy diversifies into new areas Technological innovation provides a

diverse range of investmentopportunities

Economy is producing a wide range ofgoods and services with less relianceon imports

Country Maturity

Great Britatin 1850

Russia 1950

US 1900

Germany 1910

Canada 1950



Prof. ROSA MERCADO


5. AGE OF MASS CONSUMPTION1. Individual incomes are greater than

necessary for buying essentials

2. Growing demand for additionalconsumer goods and services

3. Improved health care systems andeducation

4. Economy flourishes

Economy gears towards massconsumption

Industries on consumer productsflourish

Service Sector increasesdominance



Prof. ROSA MERCADO




Prof. ROSA MERCADO


CRITICISMS1. Too simple.

• Process of growth not as a homogenous continuum but as adiscontinuous course involving qualitative changes

2. The western- capitalist model is not the only path to economic progress.

• Need for other infrastructure – human resources (education), roads, rail,communications networks

• Assumes that all countries follow the same route of development

3. Not all countries and economies started the same way or would want thesame things as the US or western nations.

• Assumes that each country is economically and politically free

• Has a strong bias towards a western model of modernization

• Doesn’t look at variations within a country

Report Rostow development theory

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