Stages of Economic Development:

Walt Whitman Rostow:

Walt Rostow was born into a Russian-Jewish family, October 7, 1916 in New York. He was a graduate of Yale University receiving a PhD at the age of 19. He was a well know historian economist publishing over 30 novels. His best know publication was “The Stages of Economic Development” A Non-Communist Manifesto, outlining his theory of a country’s progression through economic development. Rostow began his teaching career at Columbia University and continued teaching Economic History his entire life. After a successful life of a historian economist, Walt Whitman Rostow died at the age of 86, on February 13, 2003.

Rostow’s Theory:

Rostow developed a theory regarding the stages of economic development. This describes a country’s position within their economic development and how they progress socially and economically towards a higher stage. Predominantly, as a country progresses through the stages of economic development, they become a more developed country.

5 Stages of Economic Development:

Stage 1: Traditional Society

  • This initial stage is dominated by subsistence agriculture
  • There is limited potential for economic and population growth due to the agricultural necessity for survival
  • Outbreaks of disease, and natural controls such as droughts, cause limited economic and social progress
  • The government structures are inflexible due to monarchies and dictatorship controlling
o Britain before 1750, Canada before 1880, and many of the fifth world countries today

Stage 2: Establishing the Preconditions for Takeoff

  • At a certain point, a country advances to a more complex economy, beginning their economic development
  • The Industrial Revolution began Great Britain’s progression through economic development The-stages-of-economic-growth.jpg
  • Great Britain introduced the take off stage which allowed for other countries to vary their methods of obtaining this success
  • Rostow believed that this stage could only be reached by a great achievement of a surplus of wealth
  • Transportation, communications, and natural resource exploitations could be the result of the potential invested economic savings
  • A more effective and responsive government control was a result of this development
o Western Europe achieved this stage in the late 1700’s and early 1800’s, Canada developed in the mid-1800’s, and some Fourth and Fifth World countries are in this stage today

Stage 3: Economic Takeoff

  • The introductions to technological innovations were the reasons for dramatic changes in the country’s economy
  • Agriculture progressed to primarily commercial opposed to subsistence
  • Manufacturing becomes a more important part of the economy
  • The growth of cities and the numbers of paid workers become the tertiary sector of economic expansion
o Great Britain attained this stage in very late 1700’s, France and the United States achieved this development by 1860, Canada by 1900 and Fourth and poorer Third World nations are currently in this stage

Stage 4: The Drive to Maturity

  • Extended period of growth is sustained after a country’s economy reaches take offmeasure_fig_stages.jpg
  • Per capita wealth increases as economic gain outpaces population growth
  • The economy becomes more diversified
  • Modern production methods come into use
  • Increased percentage of the nation’s wealth is invested into developing its economy
  • As viewed from historic research, 50 to 60 years after a country reaches take off, it obtains maturity
o Great Britain achieved maturity in the 1850’s, as well as France and the United States in 1910, and Canada in the 1950’s
  • In recent years, countries were able to achieve maturity more quickly than before
o Examples include; Hong Kong, Singapore, and South Korea

Stage 5: High Mass Consumption

  • Within the final stage, individual incomes are greater than necessary for buying essentials
  • Due to the high incomes, there is a growing demand for additional consumer goods and services
  • Improved health care systems and educational opportunities result from the wealth of the society
o The United States was the first to reach this stage in 1920 and Canada followed shortly after

Representation to an Economy:

Each stage of development outlines a country’s progression to becoming developed. More developing countries are trapped within the first couple stages as they are unable to proceed with a take off to begin an expansion of their economy. The higher developed countries are viewed within the last few stages as they have a greater economy and are able to sustain maturity or continue to develop and expand. The First, Second, and higher Third World countries successfully advance themselves towards a higher stage as they have a sustainable economy opposed to the lower Third, Fourth and Fifth World countries since they are unable to achieve take off. These stages present basic models for what must occur for a country to escape a lower developing economy.


The Positives and Negatives towards the Stages of Economic Development:

Walt Rostow’s model of The Stages of Economic Development, provoked controversy amongst other Developmental Economists. This is because many believed Rostow’s theory was enhanced by a Westernized mind so it was not applicable to a developing country. Others believed that the model was too vague and it varied too much among each country. Economists disputed that this model did not account for the variety of ways a nation may develop. Although there were many arguable facts regarding this specific model, Rostow began this theory as a basic outline for an action of economic development. The positive aspect of this model is that there is capability for experimental development and growth for the model.

Canada’s Economy:

Canada reached the fifth stage of High Mass Consumption before its economy reached full maturity. This is predominantly due to the explosive expansion of industries promoting a greater economy. Since Canada is a bordering country with the United States, we have been able to access assistance towards becoming more highly developed by their growth of technological innovations. Aside from the United States, Canada relies on the European countries as they are great promoters in economic expansions. Canada also has a more mature government structure that encourages growth of the country and other beneficial essentials. With society today, Canada is a highly developed country with great luxuries of health care and education which assist in the economic development towards high mass consumption. Canada is a wealthy country and there is a greater income for households which allows for options of other expenses. Although Canada has not reached full maturity, there are many other factors contributing to their success of achieving a stage 5 economy.

Demonstration Video