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War Economy

International Comparisons of War Costs

International Comparisons of War Costs

The economic burden of New Zealand's war effort was very heavy. Of the allied nations, only the United Kingdom and the U.S.S.R. entered into relatively heavier financial commitments for war. Approximate figures for the calendar years 1939 to 1944 are available for six countries.

Country War Expenditures from 1939 to 1944 as a Percentage of National Income2 (Approximate percentages)
United Kingdom 43
U.S.S.R. 37
New Zealand 31
Australia 29
Canada 29
United States of America 24

Russia did not enter World War II until June 1941, though her war expenditure was proportionately the largest of the six in 1939, and larger than all but the United Kingdom in 1940 and 1941.3 The United States of America did not enter the war until December 1941 and, with the possible exception of 1939, her proportionate expenditure was lowest of the six in each year until 1944.

It is interesting also to compare the proportionate costs of war for the years 1942, 1943 and 1944, when the war effort of each of the six was most intensive.

page 259
Country War Expenditures from 1942 to 1944 as a Percentage of National Income1 (Approximate percentages)
United Kingdom 53
New Zealand 51
Canada 48
U.S.S.R. 46
Australia 45
United States of America 41

New Zealand, in this table dealing with the most exacting years of the allied war effort, moves up to second place. The relative strain of war on her economy, according to the information used in these tables, reached 53 per cent in 1943, which was the highest level reached by any allied country in any war year. It was achieved only by the United Kingdom, Canada and New Zealand. However, whereas Canada and New Zealand reached this level in 1943 only, the United Kingdom sustained it for three years.

2 These figures are derived from a chart published in the Twentieth Report to Congress on Lend-Lease Operations, p. 41. The New Zealand figures differ from those derived from the New Zealand Official Estimates, but it is assumed that this arises from attempts to make the percentages for the six countries as comparable as possible. Comparison is made against net national income at market prices. New Zealand and other figures for calendar years may have been calculated by interpolation. In any case, no great accuracy can be claimed for international comparisons of this sort.

3 Russia was at war with Finland in late 1939 and early 1940.

1 See p. 258, note 2.