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Development Concepts

By Jntmbaya1 Jun 24, 2013 1552 Words



TASK: Discuss the Rostowian Stages of Economic Development and Critic the theory.

ADM NO: BACD/NRB/2631/13


DATE: 10TH JUNE 2012

Rostow’s theory of economic growth is one of the most influential theories in the 20th century. It was established in the 1960’s during the cold war. His theory illustrates assisting not only the lower income earning countries but also focuses on communist states like Russia. His theory describes the patterns of growth and development.

According to Michael P.Todaro and Stephen C.Smith (Tenth Edition) Rostow argues that it is possible to identify stages of development and classify society according to the stages mentioned below: * Traditional Society: This stage is characterized by a subsistent, agricultural based economy, with intensive labor and low levels of trading, inclusive of a population that does not have a scientific perspective on the world and technology. This simply means that the population here is characterized by a number of people or society that lives in rural areas and engage themselves in agricultural activities as their means of livelihood. In Most cases a majority of their natural resources is allocated to non-productive activities. * Preconditions to Take-off: This is the second stage of growth and usually embraces societies that are seen to be in the process of transition. However, it should be noted that it takes a lot of time to transform a traditional society in order for it to adapt into the modern society. A country here tries to invest in new technology like for instance purchase of machinery to use in industries hence creating employment for the people in the society and infrastructure merges this because there will be the use of various modes of transport to carry goods from one area to another. The infrastructure also comes as an advantage because the society benefits from the growth of hospitals and schools thus bring about growth in productivity in the regions. * Take-off: Rostow describes this stage as a short period of intensive growth, in which industrialization begins to occur, and workers and institutions become concentrated around a new industry. New modes of communication are also introduced here this will aid the country in the expansion of markets hence easy facilitation in terms of exports * Drive to Maturity: Rostow argues that for a country to term it as mature then development stage takes place over a long period of time, hence as standards of living rise, use of technology increases, and the national economy grows and diversifies. This is due to the application of modern technology to the bulk of its resources. Hence the new sectors replace the old .Rostow gives an example of steel industries as a symbol of maturity in a country. He mentions Germany and France as two main examples that entered the stages of maturity together. * Age of High Mass Consumption: During the time of discovery of this method, Rostow believed that Western countries, most notably the United States, occupied this last "developed" stage. He assumed that they had all what they needed to term themselves as developed. He states that here; a country's economy flourishes in a capitalist system, characterized by mass production and consumerism. This is mainly because the economy shifts from the production of heavy machinery and industries like energy to production of consumable goods like cars and fridges. World Bank Report 2013: Learning big lessons on growth from three small countries states that: Singapore, Finland and Ireland are small, resource-poor countries with high growth rates. This was achieved by producing graduates with the skills to support key industries and who are able to take advantage of globalization. The Report states that the above three countries created successful learning and innovation systems. This has enabled them to set strategic development priorities, build consensus among key stakeholders, and effectively distribute resources for research and innovation. Singapore is one of the main country’s that’ has followed Rostow’s stages of economic development and since then there has been immense changes in the country. For instance,MARCH 28, 2012, SINGAPOREThe rapid growth of Singapore, Finland and Ireland (the “Sifire” group) yields new lessons for low- and middle-income countries striving to accelerate growth says a new book published by the World Bank. The book titled Some Small Countries Do It Better notes that all three small, resource-poor countries sustained high average growth rates for over a decade. This was due to implementing policies that improved human capital and domestic innovative capacity, fostered deep engagement with international markets, firms and research networks, and created able government bodies to forge consensus around long-term strategic development objectives. In this theory, Rostow assumes that all countries have an equal chance to develop or rather term their country as a developed one, we should be aware that this is not the case because we all do not have the same resources hence cannot be said that we are stable because we have both developed, developing and underdeveloped countries. This might be due to the lack of enough resources, manpower/skill and education to enhance the development of our country. Other reasons might be because of the agricultural area of different countries we well know for instance that Ghana is well known for its production in cocoa this is necessitated by the development of that country because it brought with it the building of schools hence increased education, improved infrastructure hence good medical attention. He has a belief in the capitalist system this means that he is biased towards a western model as the only path towards development this is well explained by the stages of development mentioned above. However it should be noted that all countries will not religiously follow the steps to the latter but development will be noticed in their countries regardless.

Rostow’s theory seems to only have looked at the well established economies which are considered to have a large population and available natural resources hence has nothing to say about those countries that their economic state is still weak for instance Rwanda which after the genocide is trying as much as possible to stabilize its economy. An example of a country that has such available resources is Japan whereby with the large population results to availability of labor hence production here is easier because of ready manpower. In his theory, he assumes that growth becomes automatic this is when it reaches the maturity stage this to my opinion is not the case. For an economy to grow there are stages that it should follow because people cannot sit and wait to have any changes especially if nothing has been done. Rostow's thesis looks biased towards a western model of modernization, this is because during the time he came up with this model the only mature countries were in the west, and no controlled economies were in the "era of high mass consumption." His model does not feature the differences between sectors in capitalistic vs. communistic societies, this is because in his theory it only states that modernization can be achieved in different ways in different types of economies. Evident with the five stages of growth highlighted above. From the definition of Neo-liberalism where the control of economic factors is shifted from the public sector to the private sector. Drawing upon principles of neoclassical economics, neoliberalism suggests that governments reduce deficit spending, limit subsidies, reform tax law to broaden the tax base, remove fixed exchange rates, open up markets to trade by limiting protectionism, privatize state-run businesses, allow private property and back deregulation. In Rostow’s theory he assumes that the inevitable adoption of Neoliberal trade policies which allow the manufacturing base of a given advanced polity should be relocated to lower-wage regions. Rostow is mechanical in the sense that the underlying motor of change is not disclosed and therefore the stages become little more than a classificatory system based on data from developed countries. In his theory, Rostow has tried to fit economic progress into a linear system this has been done by trying to fit economic progress which appears as a disabling assumption. It is a false kind of judgment this is evident with the empirical evidence of many countries making false beginnings then reaching a state of progress and then slipping back. His theory fails when a country wants to acquire more advanced technologies in the sense that it can do more difficult things that few others can do especially in the developing of the economy. It takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competition during this period. Such protection is costly, because the country is giving up the chance to import better and cheaper products. Ricardo’s theory is, thus seen, for those who accept the status quo but not for those who want to change it.

Frank, Andre June 1989, The Development of Underdevelopment, Monthly Review, VOL 41, No 2 Michael .P.Todaro and Stephen C Smith (year of publication) Economic Development; Pearson Addison Wesley, 2009(X) Edition pg. 110-111 World Bank Report (2013). Retrieved from on 19th June 2013

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