NAME : DOLPHINE N KAMBUNI

REG NO : DCMC01/176/2016

UNIT TITLE : ECONOMIC DEVELOPMENT

FACULTY : SCHOOL OF COORPERATIVE AND ECONOMIC DEVELOPMENT

TASK : ASSIGNEMENT
Explain the Rostowss five stages of economic development

Traditional Society: This stage is characterized by a subsistent, agricultural based economy,

with intensive labor and low levels of trading, and a population that does not have a scientific
perspective on the world and technology.

Take-off. Manufacturing industry assumes greater importance, although the number of

industries remains small. Political and social institutions start to develop external finance may
still be required. Agriculture assumes lesser importance in relative terms although the majority
of people may remain employed in the farming sector. There is often a dual economy apparent
with rising productivity and wealth in manufacturing and other industries contrasted with
stubbornly low productivity and real incomes in rural agriculture.

Drive to maturity. Industry becomes more diverse. Growth should spread to different parts of
the country as the state of technology improves the economy moves from being dependent on
factor inputs for growth towards making better use of innovation to bring about increases in real
per capita incomes

Age of mass consumption. Output levels grow, enabling increased consumer expenditure. There
is a shift towards tertiary sector activity and the growth is sustained by the expansion of a middle
class of consumers.

Pre-conditions for take-off. Agriculture becomes more mechanized and more output is traded.
Savings and investment grow although they are still a small percentage of national income. Some
external funding is required - for example in the form of overseas aid or perhaps remittance
incomes from migrant workers living overseas.
Distinguish between economic growth and economic development

Economic Growth is the rate of expansion over a short period while Economic Development is a
process whereby an economys real national income increases over a long period of time

Economic growth is a single dimensional quantitative concept which is concerned only with the
rate of increase in national income. It ignores distribution of income and it ignores qualitative
aspects of human life while Economic development is broader in nature. It not only includes the
quantitative change but also includes certain qualitative changes in the economy

Growth Economic growth is the rate of change at which an economy is growing year after year
or the percentage change in the Gross Domestic Product of a country year after year while
Economic development is an increase in overall living standards and quality of life of the people,
on this basis

Economic growth is a narrow concept while economic development is a broad concept

Economic growth is developed economies while economic development is developing

economies

Economic growth is a more relevant metric for progress in developed countries. But it's widely
used in all countries because growth is a necessary condition for development while Economic
growth is a more relevant metric for progress in developed countries. But it's widely used in all
countries because growth is a necessary condition for development.
Explain any four features of developing country familiar with.

Small and large scale production _ Most of the developing countries focus on large scale
production of low cost products causing low income due to low opportunity cost.

Production for self-consumption A large amount of goods and services produced is consumed
by the producers themselves. Majority of farmers grow crops for their own consumption

Illiteracy The important feature of a developing country is its illiteracy. Ex: Pakistan has 56%
literary rate. Though efforts are made to eradicate illiteracy but there is still considerable
illiteracy and unskilled labour due to lack of resources and a large population.

Underutilization of resources developing .Countries lag in modern technology & technical

equipments. They use conventional methods & tools for production. Even if they have got
significant amount of natural resources and large number of labour force, due to lack of technical
knowledge, natural resources are not discovered and fully utilized

Poverty
Poverty is the vicious problems of developing economies. Due to poverty there is low income,
lesser investment, lesser product in and the result is the poverty again

Lack of Capital and Technology because the countries are poor, they save less which results
in low capital formation. They possess less investment capital. In addition their existing
technology is old and unproductive.