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Describe the stages of economic development described in Rostow's theory of modernization and growth. Then, give an example of at least two ways countries may face challenges when following this model.

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1.Traditional society: Is an agricultural economy of mainly subsistence farming little to which is traded.

2.Pre-conditions for take off: Agriculture become more mechanized and more output is traded.

3. Take-off: manufacturing industry assumes greater importance.

4.Drive to maturity: The growth of the industry spread to different parts of the country.

5.Age of mass consumption: Output levels grow enabling increased consumer expenditure.

Example:
1. The size of the capital stock is limited and of low quality resulting in very low labor productivity.

2. Savings and investment grow although they are still a small percentage of national income.

Economic and social development is the process through which the economic well-being and quality of life of a nation, region, local community, or person are enhanced.

What is Economy Development?

Economic and social development is the process through which the economic well-being and quality of life of a nation, region, local community, or person are enhanced in accordance with certain aims and objectives.

The stages of economic development described in Rostow's theory of modernization and growth are:

1.) Traditional Stage: This stage is distinguished by a subsistence-based, agricultural-based economy with heavy work and minimal levels of commerce, as well as a people without a scientific viewpoint on the world and technology.

2.) Preconditions to Take-off: A society begins to develop industry and a more national/international—rather than just a regional—perspective.

3.) Take-Off: According to Rostow, this stage is characterized by a brief period of intense expansion during which industrialization begins and employees and institutions become focused on a new industry.

4.) Drive to Maturity: This stage occurs over time as living standards rise, technology becomes more prevalent, and the national economy grows and diversifies.

5.) Age of High Mass Consumption: Rostow claimed that Western countries, most notably the United States, were in the final "developed" stage at the time of writing. In a capitalist system defined by mass production and consumption, a country's economy grows.

Learn more about Economy Development:

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