Rostow's Stages of Growth

Topics: Investment, Economic growth, Economic development Pages: 1 (282 words) Published: August 11, 2011
Rostow’s Stages of Growth

According to Rostow doctrine, the transition from underdevelopment to development can be described in terms of a series of steps or stages through which all countries must proceed. As Rostow wrote in the opening chapter of the The Stages of Economic Growth:

This book presents an economics historian’s way of generalizing the sweep modern history... It is possible to identify all societies, in their economic dimensions, as lying within one of the five categories: (1) the traditional society, (2) the pre-conditions for take-off into self-sustaining growth, (3) the take-off, (4) the drive to maturity, and (5) the age of high mass consumption.... These stages are not merely descriptive. They are not merely a way of generalizing certain factual observations about the sequence of development of modern societies.

The advanced countries, it was argued, had all passed the stage of “take-off into self-sustaining growth”, and the underdeveloped countries that were still in either the traditional society or the “preconditions” stage had only to follow a certain set od rules of development to take off in their turn into self-sustsaining economic growth.

One of the principal strategies of development necessary for any take-off was the mobilization of domestic and foreign saving in order to generate sufficient investment to accelerate economic growth. The economic mechanism, by which more investments by which more investment leads to more growth can be described in terms of the Harrod-Domar growth model, today often referred to as the AK model because it is based o a linear production function with output given by the capital stock K times a constant, often labelled as A.
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