Market forces are being introduced in public spheres such as higher education and public health, which hitherto were closed to such forces. Ironically, it is the state that is responsible for this process of marketisation. Some see this state action as leading to a growing influence of the state in public policy while others see an attenuation of its role. Critiquing this market-state incompatibility thesis from a geo-spatial perspective on globalisation, this paper calls for an articulation of state-market relations that emphasises their interpenetration. Using Botswana as a case study, the paper argues that although on-going tertiary education reforms in the country are characterised by the state's promotion of market forces this does not mean that the state is retreating, leaving the sub-sector to the vagaries of the market. Contrarily, the state is employing marketisation to reform the sub-sector so that it is responsive to labour and skills demands of an economy aspiring to be knowledge-based. (Contains 6 notes.)