Rostow Model

What is the Rostow Model?

The Rostow Model, Rostow's 5 Stages of Economic Growth, or Rostow's Model of Economic Development, is a modernisation theory model depicting how countries move from an underdeveloped society to one that is more developed and modern. Modernisation Theory appeared in the middle of the 20th century as a theory to improve economic development in underdeveloped countries.

According to Rostow, for a country to become fully developed, it must follow 5 particular stages. As time progresses, a country will go through each stage of economic growth and eventually reach the final stage as a fully developed nation. The 5 stages of economic growth are:

• Stage 1: Traditional Society
• Stage 2: Preconditions for Take-off
• Stage 3: Take-off
• Stage 4: Drive to Maturity
• Stage 5: Age of high mass consumption

Who was W.W. Rostow?

Walt Whitman Rostow was an economist and U.S. politician born in 1916 in New York City. In 1960, his most notable novel was published; The Stages of Economic Growth: A Non-Communist Manifesto. His novel explained that development was merely a linear process which countries must follow to achieve development. At the time, development was seen as a modernisation process, exampled by powerful western countries dominated by capitalism and democracy. The West had already achieved this developed status; through modernisation, other countries must follow. His novel was based upon these ideals. Rostow also believed that economic development would not occur in communist states. He even described communism as a 'cancer' which would inhibit economic development.² This made his model particularly political, not just as a theory for helping less developed countries develop further.

Fig. 1 - W.W. Rostow and The World Economy novel

Stages of Rostow's Model of Economic Development

Each of the 5 stages of the model captures the stage of economic activity a country is experiencing. Through Rostow's stages, a country will move from its traditional-based economy, industrialise, and eventually become a highly modernised society.

Stage 1: Traditional Society

In this stage, a country's industry is characterised by a rural, agricultural and subsistence economy, with little trading and connections with other countries or even within their own nation. Bartering is a common characteristic of trading in this stage (swapping goods rather than purchasing them with money). Labour is often intensive, and there is very little technology or scientific knowledge. Output from production exists, but for Rostow, there will always be a limit on this due to the lack of technology. This stage shows countries to be very limited, with a low level of development. Some countries in Sub-Saharan Africa, or smaller pacific islands, are still considered to be in stage 1.

Stage 2: Preconditions for Take-off

In this stage, early manufacturing begins to take off, albeit slowly. For example, more machinery enters the agricultural industry, moving away from purely a subsistence food supply, helping to grow more food and reduce labour intensiveness.

National and international connections start to develop, as well as education, politics, communication, and infrastructure. For Rostow, this take-off is accelerated by aid or Foreign Direct Investment from the West. This is also a stage for entrepreneurs, who begin to take risks and make investments.

FIg. 2 - Machinery entering the agricultural sector

Stage 3: Take-off

This stage is characterised by industrialisation and rapid and sustainable growth. Rapidity is essential here, giving the impression of a kind of revolution. The entrepreneurial elite and the country's creation as a nation-state are vital in this stage. After this industrialisation, then follows the increase in the production of goods that could then be sold in far-away markets. Urbanisation also starts to increase as a result of rural-urban migration towards factories in cities. There are vast infrastructure improvements, industries become internationalised, investments in technology are high, and the population becomes wealthier. Countries that are considered developing countries today are in this stage, such as Thailand.

Stage 4: Drive to Maturity

This stage is a slow process and takes place over a more extended amount of time. At this stage, the economy is said to be self-sustaining, meaning it essentially supports itself, and economic growth continues naturally. Industries start to develop further, agricultural production goes down, investment increases, technology improves, skills diversify, urbanisation intensifies, and further infrastructural improvements occur. The economy grows alongside the population's standards of living. Over time, these improvements keep developing further as new sectors flourish. This economic growth stage can be exampled by the newly emerging economies of the world, such as China.

Stage 5: Age of High Mass Consumption

The final stage of Rostow's model is where many western and developed nations lie, such as Germany, the U.K., or the U.S., characterised by a capitalist political system. This is a high-production (high-quality goods) and high-consumption society with a dominant service sector.

Consumption is beyond the basic level, i.e., no longer consuming what is necessary, like food or shelter, but more luxury items and luxury living. These powerful countries are characterised by high economic standing and economic growth.

Rostow's Development Model Country Examples

Rostow's model is directly informed by the growth of western economies; therefore, countries like the U.S. or the U.K. are perfect examples. However, since Rostow's publication, many developing countries have followed his model.

Singapore

Singapore is a highly developed nation with a hugely competitive economy. However, it wasn't always this way. Until 1963, Singapore was a British colony, and in 1965, the country gained independence. Singapore was significantly underdeveloped at the time of independence, shrouded in the shadows of corruption, ethnic tensions, unemployment, and poverty.³

Singapore went through the industrialisation process quickly after in the 1960s, becoming considered a Newly Industrialising Country at the beginning of the 1970s. The country is now characterised by manufacturing, advanced technologies, and engineering, with a heavily urbanised population.

Fig. 3 - Singapore is characterised by its high development levels.

Advantages of Rostow's Model

Rostow's Model was created as a means of supporting underdeveloped countries. An advantage of the model is that it provides a framework for this to occur. Rostow's model also provides some understanding of the state of the economic world today and why there are more powerful countries than others. At the time, the model was a direct way of showing U.S. power over communist Russia. Rostow's attitude towards communism was reflected in his development model; capitalist supremacy ruled over communist ideology and was the only future of successful development. From a political and historical perspective, Rostow's model was triumphant.

Criticism of Rostow Model

Although Rostow's model has its advantages, it has been heavily criticised since its birth. In fact, his model is incredibly flawed for the following reasons:

• The first stage is not necessary for development; countries like Canada never had the traditional stage and have still ended up highly developed.
• The model is categorically split into 5 stages; however, crossovers often exist between the stages. Each stage may have characteristics of other stages, showing the process to be not as clear-cut as Rostow says. Some stages may even be missed out entirely. The stages are also very generalised, and some scholars believe they undermine the complex development processes.
• The model doesn't consider the risk of countries going backwards, nor what happens after stage 5.
• In his model, Rostow highlights the importance of manufacturing industries, like textiles or transport infrastructure. However, it doesn't take into account the expansion of other industries, which could also lead to economic growth.
• There is not a huge amount of evidence for this model; it's based on a handful of countries, thus, may not be the most reliable.
• Environmentalists are huge critics of the model; the final stage focuses on the mass consumption of resources, which, in the current climate crisis, is not favoured.