James R. Markusen is a Professor of economics at the University of Colorado at Boulder. His principal interests are in the field of international trade. His research for the last 20 years has concentrated on the location, production, and welfare effects of large-scale firms and multinational corporations. He has worked both on theoretical models and numerical, computer simulation models. Many years of work researching multinational firms culminated in a book on the role of multinationals in the international economy, and were published by the MIT press in the summer of 2002. We contacted the Professor Markusen to discuss transitional phases in the developing countries, and he replied to our questions in an exclusive interview to Gulan Magazine as the following:

* Every process of the transitional phase related to the development and management of the infrastructure of institutions, so they are essential for the success of the transitional phase, to what extend development and rebuilding process are important for the transitional phase in any developing country?
- Yes; I think there are many things involved in this and many of them have to do with essentially government institutions and building a reliable predictable environment in which business can began to invest and train workers can grow. If you look at some successes and failures around the world of the last fifty years you see that the ones that provided really good governance in which businesses both domestic and foreign believed that they could safely invest and have secure property write and contract enforcement are much better than the weak governments and weak institutions. So; for example Singapore created a tremendously good environment for investment way back beginning in the 1960s and went from being a poor country to being a world leader, and China did the same thing and eventually completely changed whole way the country did administer government and build with investment and so forth and just did much better than other countries.

* Corruption is not a special case for developing countries but we see corruption in well developed countries but the corruption in the developing countries especially in the transitional phase leads to the collapse of the institutions which darkens the future of that country so how is it possible to combat corruption in developing countries?
- This is an extremely serious problem. I think again; Singapore and China deal with this It was difficult and long but they created an absolute rule to make the public service in these countries a meritocracy, hiring in the public sector and promotions in the public sector were done by some nations and strictly on the basis of merit. Singapore used the tactic of paying its top public servants very well to turn corruption, and they do that if they were corrupting anything they will be punished and they will lose their well paid jobs. I don’t have any easy solution for that but fundamental to fighting corruption is to make things strictly on the basis of merit employment, access to universities even and so forth has to be on the basis of merit and it has to be very clear that the family connections and the political, religious connections no to be allowed to influence those decisions.

* The democracy building process is at easily beginning phase in the developing countries and the freedoms should be managed within the frame work of law so to what extend sovereignty of law is necessary for democracy developing process?
- I think those things are extremely important and not just a theory but looking at what countries succeeded and what countries are failed over the last 50 years all of the thing you just mention I think are really stand out as being crucial to creating success.

* Usually; the political parties face difficulties in dealing with each other and that leads to tension between parties due to lake of ability of having negotiations with each other, how political parties can solve their problems through dialogue?
- In some of the countries so again take the two I just mentioned Singapore and China they certainly didn’t were particularly democratic but what they did do is in the ruling party they had this very strong sense of meritocracy for promotions and job assignments, and well the Chinese communist party were very authoritarian there was a lot of democracy and meritocracy in side that party that allowed to make decisions quickly and affectively even though not particularly democratic. You can’t trust say that India which has very long tradition of democracy it suffer greatly from all the problems that you just mentioned about political fighting between different parties even sometimes within parties that is prevented a lot of things from getting down in these countries. People from India say that looking at the ability of china to make decisions actually make change India to make politicians to realize that if they don’t cooperate and don’t focus on common objectives they just fall further behind.

* Some experts think that good governance is essential step for the transitional phase and it requires strong infrastructure of the state institutions which the developing countries lake it so how is it possible to pursue good governance in the developing countries?
- I think one thing the countries should do is study the successors and failures in the world and from a very practical point of view, sometimes things getting in trouble in developing countries because its debated and dominated by ideology and for political ideology and religious ideology and that’s not good government you take very practical decisions its very practical pragmatic set of things that needs to be done. And if I was to talk to the most developing countries I would say you have to separate practicality and pragmatism from ideologies. Study from a practical point of view whose done well over the last 50 years development and who’s done badly and try to learn the practical lessons and follow those practical lessons instead of trying to deal with the problem from a political, religious ideological point of view.

* In the developing countries the ratio of the young people are high how the government of developing countries can respond to the demands of the young people?
- This has been a huge issue in many countries and I'm sure you know that. I have a lot of problems with Chinese and Chinese communist party but for one thing I do admire is that they focus very heavily on this problem starting in the 1970s and it was one of the things that let them really to liberalize the economy and create the institutions were foreign firms come invest and train workers. It was motivated exactly by these issues to try to get jobs and training for the young people. Some countries have tried to I think this is the case for privet sector whether they domestic or foreign its absolutely crucial because whenever government tries to get into the business that we are going to try create new jobs for everyone and the public service whatever it’s a disaster the government can’t do that just public sector jobs, low creativity and author the energy of young people doing that I really have to be a free of private sector economy and give private sector incentives to expand their business, to make investment to train workers and so forth and as I said this is a decision the Chinese had to reach even though ideologically they really opposed to that they really opposed to the idea of private sector large capitalistic firms, but after Mala died it just become clear of the only way to lift up the country and absorb a large number of young people is to exactly do this major liberalization and major change and attitude. Again; this have to be driven by practicality and not ideology and I really think the way it has to be done if you look at the countries in Europe you’re going to say that, that countries with the highest rate of unemployment so Spain maybe Italy Greece these are countries that have very rigged labor market and having so many rules and regulations and strain of privet businesses but they don’t create jobs these countries have 20-30% of used unemployment young people of their 20s and that is a horrible waist of talent and energy as you say and the only way to do that and I'm not talking from ideological point of view I'm talking practicalities it has been proven that what has to be done is just very big liberalization of the rules and regulations facing privet business.

Transcription: Mahmud Samih