Rostow’s ‘stages of economic growth’ model shows five crucial stages in the economic development of a country, and they are the following:
- The traditional society
- The preconditions for take-off
- The take-off
- The drive to maturity
- The high mass consumption
The first stage in the model is a traditional society, this is where the countries’ population use primitive technology and their trade is still based on bartering. Here, it is mostly an agricultural economy of mainly subsistence farming, where there is little trading, and this is basically where society starts out.
The second stage is called the preconditions for take-off, which shows how the country has improved technology and has an increase in trade and investment. Here, agriculture becomes more mechanised, more output is traded, social structure changes and existing technologies continue to develop.
The Take-off stage is third and Rostow believed it to be the most important of all the stages because the economic growth here is rapid and sophisticated. Here, political and social institutions begin to develop, urbanization increases, and agriculture assumes lesser importance since the manufacturing industry assumes much greater importance. An example of the Take-off phase is the Green Revolution in the 1960s.
The fourth stage is the drive to maturity stage, and is a period of self-sustaining growth, with increasing investment and diversification. In this stage, multiple industries expand, the rapid development of transportation infrastructure occurs, and economic growth spreads to different parts of the country as technology improves.
The fifth and final stage of the Rostow model is the high mass consumption. This stage is characterized by an urban society with increased output levels, widespread consumption of high-value consumer goods, and consumers with disposable income.