ABSTRACT
In The Retreat of the State, Susan Strange admonished fellow scholars in the field of international political economy to broaden their analytic horizon and pay more attention to non-state actors. As she convincingly argued, the state is changing and may in certain ways be declining. The Retreat of the State represented a significant change in Strange's intellectual orientation. Her earlier writings on international political economy gave primacy to the state or at least equal prominence to the role of states and of the market. In The Retreat of the State, Strange did not devote much attention to the issue of macroeconomic policy. However, her argument that the power of the state over economic affairs had significantly declined implies that national governments could no longer manage their economies. The contention that macroeconomic policy has become ineffective in a globalized economy can be placed in proper perspective by considering what economists call the 'trilemma' or 'irreconcilable trinity' of economic policy.
