Neutral economies during World War I

Neutrality in the Great War was an exception, rather than the rule. Only a handful of countries remained neutral by 11 November 1918: the Netherlands, Spain, Switzerland, and three Scandinavian countries – Denmark, Norway, and Sweden – in Europe; and Argentina, Chile, and Mexico in South America. In this chapter, we concentrate on the six neutrals in the northern, northwestern, central, and southern parts of Europe. Compared to European belligerents, neutrals were minor but not insignificant. Neutrals accounted for around 14%, 9%, and 8.5% of total European area, population, and GDP, respectively. On average, neutral countries were more developed than the belligerents. Average GDP per capita of neutral countries in 1913 was higher than that of the Central Powers or the Allies. Neutrals had much to lose by entering the war. The size and level of economic development influenced their decision to remain neutral. However, this was also dependent on the political goals and strategic economic actions of the Allies and the Central Powers towards the neutrals. Being neutral did not necessarily leave much room for manoeuvre in politics or business.