Modern security threats are increasingly complex, blurring the lines between peacetime and wartime and placing pressure on legal and operational frameworks. To respond effectively, it may be necessary to scale up defence production and strengthen supply security even in peacetime. This approach facilitates a transition toward a “war economy,” which can better prepare the Netherlands for potential military conflicts. However, implementing such measures carries significant legal, economic, political, environmental, and social implications.
RAND Europe’s research draws lessons from historical and international examples of war economies to improve societal resilience. The study defines a war economy as an economy in which the government systematically intervenes to increase societal resilience and military preparedness to achieve strategic objectives during conflict. The research identifies four phases: peacetime economy, increasing societal resilience, preparedness, military conflict, and phase-out. Each phase carries implications across political, economic, societal, technological, legal, environmental, and military domains, emphasizing the importance of resilience.
The research methodology included a literature review, stakeholder interviews, an expert workshop, and case studies of the United Kingdom, Sweden, and Ukraine. These international examples highlight approaches to preparedness, rapid production adjustments, and strategic autonomy while illustrating challenges and lessons applicable to the Netherlands. The report underscores that a war economy allows governments to accelerate defence production, advance military technologies, and respond decisively to threats. However, benefits must be weighed against potential far-reaching consequences across society.
Key recommendations for the Netherlands include ensuring societal resilience through social cohesion and integration between ministries, drawing on total defence concepts from Scandinavian countries. Mapping and securing critical supply chains is essential, especially given reliance on non-EU sources for strategic raw materials. Coordination with the European Union is necessary to manage inflation, labour shortages, procurement, financing, and defence industrial base strategies while balancing NATO obligations.
The report also stresses the importance of clarifying the legal framework governing crisis responses, particularly where regular crisis law overlaps with constitutional emergency provisions. Effective coordination with defence and high-tech industries across the economy is critical to ensure that companies are structurally involved in planning and decision-making. By taking these measures, the Netherlands can better prepare for potential military conflicts while mitigating legal, economic, and societal risks associated with transitioning toward a war economy.
