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What Are the Different Stages of Economic Growth?

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  • Written By: Karize Uy
  • Edited By: Lauren Fritsky
  • Last Modified Date: 07 August 2014
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According to Walt Whitman Rostow, an American economist who became the National Security Adviser during the Johnson presidential administration, there are five stages of economic growth. They include drive to maturity, traditional society and high mass consumption. The other two are preconditions for take-off and take-off. Rostow developed and wrote about his theory of economic growth in a book entitled “The Stages of Economic Growth: A non-communist manifesto,” and asserted that all societies can be categorized in one of the stages. “Rostow’s Stages of Growth” is only one of the theories regarding economic growth and development, but is one of the most prevalent and influential among many economic theories.

In the first stage of the traditional society, a country or a society usually has a limited perception and usage of technology, what Rostow describes as “pre-Newtonian.” It is also limited in terms of product outputs because technological resources are very restricted, usually resulting in a large dependence on the agricultural industry. Societies in this stage are also usually affected by calamities like famine, plagues, and wars, but this does not necessarily mean political and economic conditions were unstable. Economists may group the early Chinese dynasties and some African tribes still existing today to be under the traditional society.

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Among the many stages of economic growth, the second stage of the preconditions for take-off is most considered the transitional stage where a society tries to embrace change as a means of development. In general, three events usually occur in a society preparing for development, one of which is growth of other industries, usually due to the influence of other societies that are more developed. International trade also increase and the profits from both the booming industry and trade are allocated to the expansion of more industries and businesses. Agriculture may still play an important role as the produce can be a part of the international trade.

Once all the opportunities have opened, the society’s economy goes toward the take-off stage, where there is a sudden spike of growth in terms of wealth and resources. In this stage, the traditional form of economy has completely transitioned to become a modern and progressive economy. Rostow describes societies in this stage as having a “self-sustained growth” that will propel them towards the next stages. It may take a long while, sometimes as long as a century, for the society to attain a progressive status quo and reach the highest stages of economic growth. This period of maintenance is the fourth stage, the drive to maturity.

Once the economic condition of the progressive society has been stable for a long period, the society now enters the last stage, the age of high mass consumption. In this stage, the society experiences such technological and industrial progress that it can choose to distribute its resources to other so-called needs, such as social welfare and military strength. A country, however, that has reached the desired higher stages of economic growth cannot guarantee that its economic progress will not digress.

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