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Questions and Answers
What is the essence of Rostow's stages of growth according to the text?
What is the essence of Rostow's stages of growth according to the text?
Which stage of economic growth is characterized by a hierarchical social structure with dominant family and class connections?
Which stage of economic growth is characterized by a hierarchical social structure with dominant family and class connections?
What is the main source of income for both the state and the peasants in the Traditional Society?
What is the main source of income for both the state and the peasants in the Traditional Society?
When did the 'Pre-condition for Take-off' stage begin according to Rostow?
When did the 'Pre-condition for Take-off' stage begin according to Rostow?
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What replaced feudalism during the 'Pre-condition for Take-off' stage?
What replaced feudalism during the 'Pre-condition for Take-off' stage?
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Which group had concentrated political power in the Traditional Society?
Which group had concentrated political power in the Traditional Society?
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What level of investment is required in the transition period according to the text?
What level of investment is required in the transition period according to the text?
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Which sector should receive the main direction of investment in the transition period?
Which sector should receive the main direction of investment in the transition period?
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What is defined as 'take-off' by Rostow in the text?
What is defined as 'take-off' by Rostow in the text?
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What is one necessary condition for 'take-off' in a society according to Rostow?
What is one necessary condition for 'take-off' in a society according to Rostow?
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Where does domestic finance for take-off historically seem to come from?
Where does domestic finance for take-off historically seem to come from?
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Which approach for 'take-off' emphasizes the importance of a leading growth sector?
Which approach for 'take-off' emphasizes the importance of a leading growth sector?
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Study Notes
Radical Changes for Economic Growth
- The main economic requirement for transition is to raise the level of investment to at least 10% of the national income to ensure self-sustaining growth.
- Investment should focus on building social overhead capital, especially transportation and telecommunication to enlarge the market size.
- A technological revolution in the agricultural sector and a transfer of surplus from agriculture to industry are necessary.
- An expansion of imports, especially capital goods, is crucial.
Social Front
- A new elite (middle class) must emerge to fabricate the industrial society, superseding the land-based elite of the traditional society.
- The new elite must channel surplus from agriculture to industry.
Political Front
- The establishment of an effective modern government is vital for economic growth.
Take-off Stage
- Take-off is defined as an industrial revolution tied directly to radical changes in the methods of production having an impact over a short period of time, lasting for two decades.
- It is the most important stage in the life of the society.
- Three necessary conditions for take-off are:
- A rise in the rate of productive investments to a level in excess of 10% of the national income.
- The development of one or more substantial manufacturing sectors with a high growth rate.
- The existence of a political, social, and institutional framework that can foster economic development.
Approaches for Take-off
- Two approaches for take-off are:
- Aggregate approach: based on Harrod model of growth, G = s/y.
- Leading-sector approach: emphasizes the importance of leading growth sectors for take-off, based on the principle of unbalanced growth theory.
Rostow's Stages of Economic Growth
- Rostow's stages of growth are:
- Traditional Society
- Pre-conditions for Take-off
- Take-off
- Drive to Maturity
- Age of Mass Consumption
- The Traditional Society is characterized by:
- Limited production and backward technology
- Hierarchical social structure with dominant family and class connections
- Political power concentrated in the hands of the landed aristocracy
- More than 75% of the population engaged in agriculture
Pre-condition for Take-off
- The transition stage between feudalism and take-off is characterized by:
- Creation of all pre-conditions for sustained economic development
- Started in Western Europe and Britain at the end of the 15th century and the beginning of the 16th century
- Marked by the rise of nation states and modern age, replacing feudalism and medieval age
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Description
Learn about Walt W. Rostow's theory of economic development which categorizes societies into stages of growth. Explore the five stages of economic growth according to Rostow: Traditional Society, Pre-conditions for the Take-off, Take-off, Drive to Maturity, and Age of Mass Consumption.
