At least up to early 1990s most third world countries governments had been intensively participating in economic activities of their respective states. In many instances this has been in collaboration with Transitional corporations (TNCs).This article attempts to analyze the objectives that prompted the governments to enter into joint ventures with TNCs.it has been argued in the paper that such objectives were hardly achieved. The article ends up by proposing the new role of the governments in the current era of liberalization and globalization.