The Global North talk constantly about the "Finance Gap", but finance for climate is limited by orthodoxy, not reality.
Today’s economic orthodoxy is rooted in neoclassical economics. It treats a lack of public finance as a natural constraint, downplaying the state’s role in shaping the economy and obscuring how money is actually created.[1] In reality, though, the only true constraints lie in the availability of real resources—workers, materials, infrastructure—to meet our collective needs.
These estimates rely on production functions and assumptions about capital that carry through all the problems Robinson identified. In doing so, they offer the illusion of precision while quietly embedding deeply questionable assumptions about technology, efficiency, and pricing that lead ultimately to needlessly inflated headline costs. By collapsing everything into a single variable, these models omit vital questions of coordination and resource planning. They
Export earnings are often volatile, especially for countries dependent on raw materials whose prices fluctuate on global markets. Foreign investment, meanwhile, can be highly selective and short-term, chasing speculative returns rather than long-term development. And borrowing, particularly from institutions like the International Monetary Fund (IMF) or World Bank, is rarely unconditional. Positioned on the margins of this system, many countries find themselves trapped in recurring cycles of debt, austerity, and underdevelopment.
The “Asian Tigers”—Hong Kong, Singapore, South Korea, and Taiwan—and more recently China, did not passively wait for foreign capital. Instead, they followed state-led strategies: implementing long-term industrial policies, investing in infrastructure and education, protecting key sectors during early stages of development, and actively managing trade and capital flows. Their governments treated development as a national project, not something to be outsourced to international markets.
If this chaos has an upside, it is that it presents an opportunity to build an alternative—and radically more just—financial architecture, and to confront the economic orthodoxies that needlessly constrain what is considered possible.
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