Geography
Rostow Model
The Rostow Model, also known as the "Stages of Economic Growth," is a framework that outlines the development stages of a country. It suggests that all countries go through five stages of economic development, from traditional society to high mass consumption. The model is criticized for its linear approach and lack of consideration for social and political factors influencing development.
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6 Key excerpts on "Rostow Model"
- Nicholas A. Ashford, Ralph P. Hall(Authors)
- 2011(Publication Date)
- Yale University Press(Publisher)
It is beyond the scope of this book to provide a comprehensive review of that liter-ature. What we do provide is the salient evolution of major thinking that has guided economic and indus-trial policy from Adam Smith to David Ricardo to current innovation-based perspectives, including the so-called knowledge-based economy. This section draws heavily on the scholarship of R. Ayres and Warr (2009), Drucker (1994, 1999), Niehans (1990), Schum-peter (1939), and Todaro and Smith (2009). 3.2.1 Rostow’s Stages-of-Growth Model After the end of World War II, concern with theo-ries of growth became particularly prevalent, espe-cially in the case of poor or underdeveloped countries. Western economists, however, only had one eco-nomic growth paradigm to draw conclusions from— that of the economic development of the Western world. Their rationale lay in the fact that all devel-oped Western societies were in essence agrarian at some point of their histories, but industrialized through a series of steps or stages. Out of this intellectual environment came the stages-of-growth model of development, the most outspoken proponent of which was the American economist Walter Rostow (Todaro and Smith 2009). The rationale of this model was fairly obvious. All industrialized countries, Rostow argued, had already completed a stage of “takeoff” and had moved to-ward “self-sustaining growth.” The underdeveloped world, according to this mind-set, was still in either the traditional society or the “preconditions” stage and thus had to follow a particular set of prescriptive policies in order to move to the next stage (ibid.). Generally, the success in rebuilding Europe through massive financial aid in the Marshall Plan suggested that a similar influx of capital was needed to advance the faltering economies of Asia, Africa, and Latin America.
- Richard Chorley, Peter Haggett(Authors)
- 2013(Publication Date)
- Taylor & Francis(Publisher)
These criteria are very useful in assessing proposed conceptual/historical models. The earliest such were the ‘stage theories’ of certain late nineteenth-century German economists, such as List, Hildebrand, Bucher and Smoller. These models organized the economic history of the then advanced countries into stages distinguished from each other by a variety of criteria – by character of exchange system in Hildebrand’s model (barter; money; credit), by dominant occupations in List’s (savage; pastoral; agricultural; agricultural and manufacturing; agricultural, manufacturing and commercial) (Enke, 1964, pp. 191–194). However, these early stage models were in fact little more than descriptive classifications of different types of economic organization supposed to follow each other in time (Goldsmith, 1959, p. 25): and when tested against the real world, their extremely low level of applicability rendered them virtually useless as analytical tools (Hoselitz, 1960, pp. 193–238; Meier and Baldwin, 1957, pp. 143–147; Gras, 1930).The attempt to develop a more sophisticated and meaningful stage model of economic growth has only been made in quite recent years. Since its initial formulation (1955, Chap. 7 , and 1956), extension (1959) and final elaboration (1960), Rostow’s generalization of ‘the sweep of modern history’ as ‘a set of stages-of-growth’ (Rostow, 1960, p. 1) has attracted remarkable attention. Accepted with alacrity both by economists concerned with underdeveloped countries (Haq, 1963, p. 13; Das-Gupta, 1965, p. 56; Enke, 1964, p. 201; Meier, 1964, p. 3; Brandenburg, 1964, p. 96) and by the intelligent public (Ohlin, 1961, p. 648; Magee, 1965, p. 76), it has none the less provoked strong criticism from economists in developed countries. Its five stages are portrayed diagrammatically in Figure 8.2 . Rostow’s own chart applying the model to particular countries is reproduced in Figure 8.3 .8.2 The Rostow Model.8.3 The Rostow Model Applied to Selected Countries. (Source: Rostow, 1960, p. xii. The chart was originally published in The Economist, August 15, 1959, p. 413).The model’s base-level, as it were, is the traditional society, characterized by limited technology, pre-Newtonian attitudes to science and the physical world, and a static and hierarchical social structure. As primarily exogenous influences stimulate the beginnings of a rise in the rate of productive investment, the installation of ‘social overhead capital’ (roads, railways, etc.), and the evolution of a new social/political elite, the preconditions for take-off stage develops, with agriculture and extractive industry playing a key role. The crucial stage, however, is take-off, the ‘decade or two’ when economy and society ‘are transformed in such a way that a steady rate of growth can be, thereafter, regularly sustained’ (Rostow, 1960, pp. 8–9). In practical terms, take-off is launched by some initial stimulus, and characterized by ‘a rise in the rate of productive investment… to over 10 per cent of national income’, the ‘development of one or more substantial manufacturing sectors, with a high rate of growth’, and the emergence of ‘a political, social and institutional framework’ which encourages growth (Rostow, 1960, p. 39). After take-off follows the drive to maturity, during which the impact of growth is transmitted to all parts of the economy. Finally, with the shift in sectoral leadership to industries such as durable consumer goods, ensues the age of high mass-consumption – although other alternatives, such as the pursuit of international power, or of the welfare state, may be chosen by particular societies instead.
eBook - PDFThe History of Development
From Western Origins to Global Faith
- Gilbert Rist, Patrick Camiller(Authors)
- 2014(Publication Date)
- Zed Books(Publisher)
4 – 8 . 103 t htor prophc The success of Rostow’s book was thus due not to its originality but, on the contrary, to its roots in a tradition that assured for it a certain legitimacy . Far from renewing ‘development theory’, it established it within the continuity of Western intellectual history, from Aristotle to Marx via Fontenelle and Condorcet. Only in this light does Rostow’s evo-lutionary schema become plausible – or rather, comforting, because it justified the dominant practices and made it seem likely that they would succeed. It is certainly no accident that The Stages of Economic Growth ended with a creed, for it was based upon faith that the age of mass consumption would spread throughout the world. This reassuring promise encouraged the Western world to continue its aid, not in the name of ‘civilization’ but in that of a more ancient belief in ‘growth’, symbolized by the ineffable virtue of compound interest that nothing could resist. But Rostow’s success was not limited to the 10 s. Whether one likes it or not, his conception of modernization has not ceased to nourish the hopes as well as the illusions of the rulers of both North and South. 38 The final goal has remained the same, and the means towards it (spread of technology, industrialization, exploitation of nature) have not changed. Every belief feeds on doubts. Today people are raising questions about the generalizability of the stages-of-growth model, the schedule keeps being pushed back, and its effects on the environment are a source of concern. But essentially everyone acts as if it were true – that is, as if it were desirable, possible and achievable. Any other view would endanger the dearly won consensus that makes it possible to soothe bad consciences and to justify the measures supposed to bring about the radiant future.
eBook - ePubLocal Economic Development
Analysis, Practices, and Globalization
- John P. Blair, Michael C. Carroll(Authors)
- 2008(Publication Date)
- SAGE Publications, Inc(Publisher)
5Regional Growth and Development
P revious chapters addressed issues of economic growth indirectly. The implications of various models for urban and regional growth have been very near the surface. Local growth is affected by location decisions of firms, the area’s place in the system of cities, and its economic structure. This chapter presents fundamental theories of urban and regional growth.Stages of Growth
Wilbur Thompson (1968) and Jane Jacobs (1969) both observed that cities pass through stages as they develop. Although there are differences in their terminologies, emphasis, and details, the similarities between their descriptions are striking. Table 5.1 summarizes the stages of growth described by Thompson and Jacobs.Both descriptions indicate that metropolitan areas initially export one or a few products. The export becomes the foundation for additional activities. During the second state, export activities become more indirect in the sense that an intermediate product may be embedded in the export of a near-final product. The next stage may be termed import substitution. Goods previously imported are produced locally. Increases in the number and complexity of linkages are emphasized in the fourth stage of each model. Thompson (1968) emphasized the connections with other cities, and Jacobs (1969) emphasized agglomeration and cluster economies. In the fifth stage, as cities grow, they hone their ability to improve what and how they produce, including the ability to copy what others have done. Thompson emphasized the ability to maintain leadership in specific industries. Jacobs focused on the ability to create new things. In both models, innovative and imitative ability contributes to further growth in the fifth stage.Table 5.1 Stages of Urban GrowthThompson’s (1968) Stages of Growth Jacobs’ (1969) Stages of Growth 1. Export specialization: “The local economy is the lengthened shadow of a single, dominant industry” (p. 15). 1. Expanding market for a few exports and suppliers of the exports. 
eBook - PDFDevelopment Economics
Theory, Empirical Research, and Policy Analysis
- Julie Schaffner(Author)
- 2013(Publication Date)
- Wiley(Publisher)
chapter Economic Growth Theory in Historical Perspective Growth has not always been understood in the broad terms described in Chapter 3. In the early years after World War II, when the field of economic development was born, physical capital accumulation was considered the main proximate source of growth and the world was thought to be filled with rigidities causing widespread market failure and necessitating heavy government involvement in development. Little thought was given to the role of institutions in the economy, and the prescriptions for good growth performance were thought to be largely the same throughout the developing world. This chapter describes the evolution of economic thought regarding growth in developing countries from then until now, paying special attention to influential theoretical growth models. It offers an instructive example of how interactions between theoretical and empirical research can advance understanding of important processes. 4.1 Introduction to Theoretical Growth Models A theoretical growth model is defined by a set of assumptions regarding the way economies work, which highlight the economic relationships that the model’s builder considers most important for understanding economic growth. The purpose of the modeling exercise is to determine what the assumptions imply about how and why growth rates might change over time or differ across countries. The assumptions on which growth models are based fall into two categories: technological and behavioral. Technological assumptions describe physical constraints on the maximum quantities of goods and services that an economy’s firms can produce from various combinations of inputs.
eBook - PDF- Stanley Brue, R. Grant, Stanley Brue, Randy Grant(Authors)
- 2012(Publication Date)
- Cengage Learning EMEA(Publisher)
Once called “ backward ” or “ undeveloped, ” these nations are now called “ developing ” or “ emerging. ” The fourth reason is that the collapse of Marxian socialism in eastern Europe and the Soviet Union has focused much attention on growth and devel-opment in these regions. Can the former communist countries transform their economies to capitalism and achieve more rapid economic growth? Finally, the rising standard of living in developing nations has become economically impor-tant to the industrially advanced nations in terms of direct investment, international trade, and international finance. This chapter examines five divergent analyses of economic growth and develop-ment. We begin with a discussion of the Keynesian growth model established by Harrod and Domar. We then examine Solow ’ s neoclassical growth model. Next, we look at Schumpeter ’ s theory of economic development and institutional change. This is followed by discussions of Nurkse and Lewis, who both provide seminal ideas on economic development. 505 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. SIR ROY F. HARROD AND EVSEY DOMAR Sir Roy F. Harrod (1900 – 1978) and Evsey Domar (1914 – 1997) separately con-tributed to what today is known as the Harrod-Domar analysis of growth. They established their theories within the Keynesian framework discussed in the previous two chapters and therefore are members of the broader Keynesian school. In 1947 Harrod, an Englishman, presented his ideas in a series of lectures at the University of London.
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