How can Rostow’s model help determine Ethiopia’s path of economic development?

Rostow’s model predicts how a country’s level of development changes over time, it describes how a country’s economy changes from relying most on primary industry (e.g. agriculture), through secondary industry (e.g. manufacturing goods) to tertiary and quaternary industry (e.g. services and research). Stage 1 (the traditional society) is the lowest level of development and stage 5 (high mass consumption) is the highest level.

  • With a negative balance of trade (imports > exports) and the primary industry as the main employer it could appear that Ethiopia is in stage 1 of Rostow’s model. However recently, government spending has led to improvements in healthcare and education, trans-national companies (TNCs) have started to arrive and infrastructure has improved. This indicates that Ethiopia has moved into stage 2 (pre-conditions for take-off).
  • Rostow’s model suggests that stage 3 (take-off) is the next step for Ethiopia, with rapid industrialisation and increasing wealth. This should trigger increased trade and investment, leading to further development.