THE
THREE STAGES OF THE SIMULATION This simulation will take each country through 3
stages* of development based on W. W. Rostow's Model of the stages of economic
growth, developed in the
1960s. Rostow studied the development of modern countries through an
historical perspective. In this study he suggested five stages of economic
growth.
ROSTOW’S
MODEL OF THE STAGES OF ECONOMIC GROWTH
I. Traditional Society
1.
Most population is engaged in agriculture (approx. 75%).
2. Productivity is limited by
lack of science and its application.
3. Trade, population, &
productivity rise and fall with the degree of political, social, and
environmental problems.
4. Faintly connections are
important in social organization.
5. Political power is
generally with these who control land.
II. Preconditions for Take-Off
1.
Shift begins from agriculture to manufacturing and industry.
2. Urbanization takes place.
3. Contact is made with more
advanced societies & world markets.
4. Institutions for
mobilizing capital appear - banks for savings and investment.
5. Centralized national state
emerges.
III. Take-Off
1.
Economic growth is a normal condition and attitude.
2. Huge investment is made in
social overhead capital.
3. Agriculture is
commercialized.
4. Capital imports (money and
equipment) are important.
5. Emphasis is on heavy
industry: steel and heavy engineering.
IV. Drive to Maturity
1. The emphasis is on steel,
chemicals, electricity, machines—tools and a range of new industries -
old industries level oft.
2. Productivity grows
substantially faster than population--leads to increased standard of
living but unequally distributed.
3. Labor - saving devices are
developed.
4. Exports develop to match
import requirements.
5. Agriculture declines
(perhaps to approx. 20% of population).
V. Age of High Mass Consumption
1. Production shifts toward
durable consumer goods and services.
2. Service employment
dominates - over 50% of the population - while agricultural employment
is below 10% and as low as 3%.
3. Population growth
stabilizes.
4. Exports become critical to
support import demands of consumers in an economy interdependent with
other economies.
5. Government Is increasingly
concerned with internal social welfare and external security.
*
This simulation will modify the five stages of Rostow's model to three
stages. Stage I: The Developing Nation, combines the Traditional Society and Preconditions
for Take-Off. Stage II: The Industrial Revolution, mirrors Takeoff, and Stage III:
The Modern Era, combines the
Drive to Maturity and High Mass Consumption. Adapted
from The Stages of Economic Growth; Second Edition; W.W.Rostow; Copyright 1960, 1971 by Cambridge
University Press.