Think Learn & Perform (TLP)

The Only Dedicated Platform for UPSC Mains Answer Writing

Day 31 – Q 1.How did World War I change the balance of economic power in the world? Analyse.

1. How did World War I change the balance of economic power in the world? Analyse. 

विश्व युद्ध-I ने दुनिया में आर्थिक शक्ति का संतुलन कैसे बदल दिया? विश्लेषण करें।


The world’s great powers assembled in two opposing alliances: The Allies (British Empire, France and the Russian Empire) versus the Central Powers (Germany and Austria-Hungary). WWI lasted from 28 July 1914 to 11 November 1918. It covers the economic mobilization of Labor, industry and agriculture. It deals with economic warfare such as the blockade of Germany, and with some issues closely related to the economy, such as military issues of transportation.

Reason being The Germans, Austro-Hungarians were seeking to raise her prestige to new heights with another war in Europe, a throwback to 19th Century thinking, as they wanted to grab more colonies at large as it was the time of industrialisation, all of the powers were mainly concern about the resources and raw materials from the less developed part of the world.

Consequences of WWI in economic sphere:

  • The fall of Russian empire after October revolution 1917, this resulted in the formation of USSR.
  • Emergence of USA as a super power, it had supplied earlier arms and ammunition to the European powers, it had maintained that non-interference policy till Germany attacked the civilian ships in the sea.
  • Beginning of the end of European supremacy, as Britain, France and other power nations in Europe lost their power and they took loans from the America, this made them to lose their power at the end of the war.
  • Japan became a powerful country in Asia, as it has started becoming the industrialised nation, and it took part at one point of time.
  • Germany and Austria has suffered losses and they had to pay reparations.
  • Britain and France, they lost their soldiers and they were debt ridden.
  • It had impacted on Asian countries as well like India and south East Asian countries, in many spheres their resources has been diverted for these nations and war.
  • This time period was also called as roaring 20’s of America as their economy boomed at this stage of the period.


WWI has resulted in changes in different spheres, as it has consequences in economy, political, social. That led to the abolition of Monarchy in Germany, Austria, Hungary, Turkey and Russia, which had resulted in the harsh clauses of the Treaty of Versailles, finally resulted in the Second World War. Even this led to the great depression in the 1929, which is a larger consequence of WWI. So we can say that balance of power post world war was shifted from European countries to the America and it had played a major role in shaping the world afterwards.

Best answer: Tango IM

Print Friendly, PDF & Email