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Forecasting for rulers
246
FORECASTING Yehezkel
FOR RULERS
Dror
The trend towards presidential-style rule in contemporary democratic governments continues. Although rulers’ positions are increasing in power and importance, the infrastructure and policy-making resources upon which they rely to govern have remained remarkably inadequate. The author argues that the contribution made by forecasting has been scant and often predicated upon the wrong aims. Forecasters and forecasting need a new approach. Ktywordr: government;
forecasting;
policy-making
A MAIN feature of contemporary governments is the growing importance of rulers, that is heads of governments and their close colleagues. Although this is perhaps less surprising in the USA with its presidential regime than in other democracies, nevertheless the increasing significance of the ruler is somewhat of a disappointment to liberal thinkers and poses serious questions for the value and effectiveness of democratic theory. Interestingly, and comparably, top executives seem to be increasingly important in many business corporations, and parallels may be drawn. The growing importance of rulers has a variety of causes, such as: 0
0 0
0
0
mismatch between the nature of main problems facing governments and the way tasks are divided between departments and administrative agencies; which builds the importance of rulers as main policy integraters and as overseers of the system as a whole (thus overcoming the inbuilt weaknesses of sub-optimization); obsolescence of many policies, which increase the importance of rulers as innovators and policy entrepreneurs; psychological needs of modern mass societies, with rulers acting as personifications of anonymous governments and providing personalized meanings for public action; changes in the power basis of politics, with traditional &uctures eroding and new structures not yet crystallized, increasing the functions of rulers as power brokers and as mobilizers of public support; impacts of mass media, which allocate large amounts of attention to rulers, thus augmenting their visibility and building up their power and impact in public.
Yehezkel Dror is Professor at the Hebrew University in Jerusalem. He is currently on leave to the Russell Sage Foundation, 112 East 64th Street, New York, NY 10021, USA. This paper is the draft prepared for the Third International Symposium on Forecasting, 5-8 June 1983, Philadelphia, USA.
0016-3287/83/040246-05$03.00
0 1983
Butterworth& Co (Publishers) Ltd
FUTURES August 1983
These and other factors operate differently, and with vacillations, in various democracies, but, a comparative study of the West seems to support strongly this thesis of the growing importance of rulers. In communist and many Third World countries, the importance of rulers is much greater, even crucial, and very visible. Again, there are many differences within and between countries. In communist countries this is demonstrated by the differing political standings of the various Soviet rulers in different periods. In the Third World the variety is greater. Even in countries where a personality cult is avoided and where rulers do not enjoy quasi-totalitarian power, the national fate is often crucially linked to an individual. Ruler’s support systems Given this growing importance and visibility of contemporary rulers the need to assess the effectiveness of their decisionmaking support in government, and thus their ability to rule, becomes paramount. Yet it is striking to note the weaknesses of the literature on the support and advice infrastructure available to rulers, including most of the formalistic writings on the White House staff and similar material from other countries. In particular, the special problems of advisory staffs, which provide forecasting for rulers, are usually mishandled. Having had the opportunity to visit the offices of more than 30 rulers in a variety of countries, including most of the OECD and a sample from the Third World,’ I have observed that there is quite a variety in the size of staffs, ranging from the very large Prime Ministerial and Cabinet Office in Australia to the few aides serving prime ministers in most European countries. But in all countries, and including the White House in the USA, the ruler’s support services demonstrated a number of pronounced weaknesses. Scarcity of advanced forecasting aids is prominent among these. Despite the obvious dependence of important decisions on the rulers’ images of the future and of the future consequences of their decisions, and despite the long ‘history of intelligence services and their inputs into top level decisionmaking, the gap between forecasting actually available to rulers and the potential of forecasting as an aid to decisionmaking by rulers is large. This conclusion is not the result of an overoptimistic view of the potential of forecasting in this respect, but rather of the failure of contemporary government support services to utilize the little which can be supplied by sophisticated forecasting. Indeed, the weakness of forecasting available to rulers constitutes a clear-cut case of the obsolescence of contemporary governmental systems. At the same time it also illustrates the underdevelopment of forecasting as a professional activity and pinpoints some of its present inadequacies in assumptions, methodologies and techniques. Rulers as ‘fuzzy gamblers’ To assess correctly the present state of forecasting and its potential for rulers, it is useful to construct an image of rulers as ‘fuzzy gamblers’. By ‘fuzzy gambling’ it is meant that decisionmaking, especially on issues which directly confront rulers, is faced by such indeterminacy, even radical ignorance, rooted
FUTURES August 1983
in the shape of the material on which decisions are made and in the environments in which they are taken. It suffices to mention oil prices, events in the Middle East, the results of forthcoming elections and the performance of the economy; these crucial and dynamic features of the real world illustrate the difficulties inherent in allocating future probabilities, and the imagination that is needed for, at the very minimum, speculating on possibilities. Therefore, decisionmaking, especially with regard to problems facing rulers (but not exclusively so), can be viewed as gambling, with the rules of the gamble being inconstant and rarely fully understandable. This analysis of the nature and intensity of uncertainties facing many high-level decision has far-reaching implications for forecasters and points to the need for a reconsideration of the basis of the forecasting activity. Thus it can be said that the allocation of subjective probabilities in forecasting is more often an illusion of help rather than a justified aid to decisionmaking; the present mathematics of probabilities is inadequate-eg in not distinguishing between quantitative and qualitative uncertainty when possibilities can or cannot be sketched respectively; and the very functions of forecasting and intelligence must be partly redefined and aimed at reducing, identifying and patterning ignorance and uncertainty. In this respect, examination of the potential of forecasting for rulers constitutes an important test case for forecasting as a professional endeavour, pinpointing as it does the uncertainty and ignorance in high-level issues that tend to be ignored or repressed by a lot of forecasting methods, especially of the quantitative type. Leaving aside the question of whether ‘fuzzy gambling’ is a consequence of structural uncertainty in a period of social, political and economic flux or a result of the limitations of the human mind in recognizing complex patterns, the pragmatic correctness of viewing much decisionmaking by rulers as ‘fuzzy gambling’ seems justified. It serves as a basis for assessing the present quality of forecasting available to rulers and the potential for its improvement.
Rulers as ‘handicapped gamblers’ An additional feature of decisionmaking by rulers should be noted. Not only they are also ‘handicapped gamblers’, suffering are they ‘fuzzy gamblers’, from a number of incapacities, albeit varied, inbuilt into the very fabric of rulership. In particular, rulers are ‘handicapped gamblers’ as follows: 0
0
0
Rulers are subjected to distorted information inputs, as a result of court politics and bureaucratic politics, and of individuals or concerns trying to gain their support. Rulers receive undue amounts of positive feedback because of the deference, even fear, which their positions inspire, and which interferes with their learning capacity. In particular, iconoclasm and heterodoxy even within entrusted teams of advisers tend to be rare. These factors reinforce and accelerate the usual weaknesses of human beings in handling uncertainty, as illustrated by recent studies in the psychology of decisionmaking.
FUTURES August 1983
Forecmtingfor rulers 249
This is only a sample of the handicaps of rulers to which many more could be and implications of strain and stress related added, viz effects of ‘groupthink’, In short, rulers suffer from gambling to the problems of ‘fuzzy gambling’. incapacities and ‘spoilers’ inbuilt into their roles. Such handicaps add to the challenges faced by forecasting for rulers.
Specifications for forecasting for rulers To consider some specifications for forecasting for rulers based on the above analysis, the first point to be emphasized is that forecasting cannot ‘un-gamble’ decisionmaking by rulers. Qualitative uncertainty and ignorance are inherent in many of the problems they face; therefore, no method can eliminate the ‘fuzzy gambling’ dimensions of decisionmaking. Indeed, efforts to do so are a major fault of much contemporary forecasting, which ignores and represses ignorance and radical uncertainty, often under the pressure of rulers who want to ease their load in decisionmaking. Instead of the repression of objective uncertainty and its displacement by illusions of subjective certainty and quantified risk, a main function of forecasting is to educate rulers to the realities of the situation, namely that they inevitably must engage in gambling with large stakes. Having worked with a number of rulers, it should be said that this is a very hard endeavour indeed. There is a danger of over-reaction, of rulers justifying improvisation as a strategy for facing ignorance and qualitative uncertainty. Hence, forecasting cannot limit itself to explicating ignorance and uncertainty, but must also explore appropriate strategies for improving ‘fuzzy gambling’. Here, cooperation is needed between forecasting and advanced decision strategies. These two are distinct endeavours analytically, but necessarily strongly connected in the practical context of aiding top-level decisionmaking. Hand in hand with educating rulers to appreciate the ‘fuzzy gambling’ nature of decisionmaking and cooperating in evolving suitable decision strategies, forecasting can and should pattern uncertainty (in the sense of mapping main uncertainties as qualitative), risk, and ignorance (ignorance in the sense that one cannot know what one does not know). Patterning uncertainty instead of reducing it -this is a main perspective on forecasting needed to serve high-level decisionmaking. A third main function of forecasting as a gambling aid for rulers is to improve decisionmaking in the face of extreme uncertainty, through ‘debugging’ -ie reducing widespread mistakes, as revealed increasingly by studies in the psychology of decisionmaking. Debugging should deal with mistaken behaviour in the face of uncertainty by top decisionmakers, such as: a wrong belief in personal capacity to control chance; arbitrary jumps between different lottery values; persistence in misdiagnosis of realities in the face of contradictory evidence and so on. These functions of forecasting for rulers, supplemented by others, do not eliminate more traditional approaches which try to reduce uncertainty, such as by allocating subjective probabilities. But, such approaches are relegated to a relatively small corner of decisionmaking by rulers. FUTURES August 1993
Structural
implications
Traditional inputs to the paperflow to rulers, such as standard intelligence estimates, cannot fulfil the functions of forecasting for rulers as indicated above. Only if sophisticated professional forecasters are an integral part of the close advisory staffs of rulers and only if a suitable form of introducing forecasting into the thinking of rulers, such as through multi-media presentations, can be utilized, is there a chance to realize some of the proposed specifications of the close interdependency between forecasting for rulers. In particular, appropriate decision strategies, patterned uncertainty and the application of both to concrete decision issues, make integration of sophisticated forecasting professionals into the close advisory staffs of rulers necessary. A precondition for moving in such a direction requires quite a transformation in forecasting knowledge and forecasting professionals themselves. A shift from an emphasis on quantitative approaches to heuristic aids for ‘fuzzy in forecasting philosophy and forecasting methodology, and gambling’, development of sophisticated professionals who apply heuristic aids to policy gambling-these are essential for upgrading forecasting so that it can help in handling the crucial issues facing societies now and in the foreseeable future, inter alia by forecasting for rulers. 2 Footnote 1. Regretfully, I could not visit rulers’ offices in communist countries and no reliable information on the staff exists in the literature. 2. For full development of the ideas hinted at in this paper, see Yehezkel Dror, Policymaking Under Adversity (New Brunswick, NJ, Transaction Books, 1984, forthcoming); and Yehezkel Dror, AdvancedAidsfor Top Decisionmaking: An Action Approach (Paris, OECD, 1983, forthcoming).
FUTURES August 1983
FORECASTING Yehezkel
FOR RULERS
Dror
The trend towards presidential-style rule in contemporary democratic governments continues. Although rulers’ positions are increasing in power and importance, the infrastructure and policy-making resources upon which they rely to govern have remained remarkably inadequate. The author argues that the contribution made by forecasting has been scant and often predicated upon the wrong aims. Forecasters and forecasting need a new approach. Ktywordr: government;
forecasting;
policy-making
A MAIN feature of contemporary governments is the growing importance of rulers, that is heads of governments and their close colleagues. Although this is perhaps less surprising in the USA with its presidential regime than in other democracies, nevertheless the increasing significance of the ruler is somewhat of a disappointment to liberal thinkers and poses serious questions for the value and effectiveness of democratic theory. Interestingly, and comparably, top executives seem to be increasingly important in many business corporations, and parallels may be drawn. The growing importance of rulers has a variety of causes, such as: 0
0 0
0
0
mismatch between the nature of main problems facing governments and the way tasks are divided between departments and administrative agencies; which builds the importance of rulers as main policy integraters and as overseers of the system as a whole (thus overcoming the inbuilt weaknesses of sub-optimization); obsolescence of many policies, which increase the importance of rulers as innovators and policy entrepreneurs; psychological needs of modern mass societies, with rulers acting as personifications of anonymous governments and providing personalized meanings for public action; changes in the power basis of politics, with traditional &uctures eroding and new structures not yet crystallized, increasing the functions of rulers as power brokers and as mobilizers of public support; impacts of mass media, which allocate large amounts of attention to rulers, thus augmenting their visibility and building up their power and impact in public.
Yehezkel Dror is Professor at the Hebrew University in Jerusalem. He is currently on leave to the Russell Sage Foundation, 112 East 64th Street, New York, NY 10021, USA. This paper is the draft prepared for the Third International Symposium on Forecasting, 5-8 June 1983, Philadelphia, USA.
0016-3287/83/040246-05$03.00
0 1983
Butterworth& Co (Publishers) Ltd
FUTURES August 1983
These and other factors operate differently, and with vacillations, in various democracies, but, a comparative study of the West seems to support strongly this thesis of the growing importance of rulers. In communist and many Third World countries, the importance of rulers is much greater, even crucial, and very visible. Again, there are many differences within and between countries. In communist countries this is demonstrated by the differing political standings of the various Soviet rulers in different periods. In the Third World the variety is greater. Even in countries where a personality cult is avoided and where rulers do not enjoy quasi-totalitarian power, the national fate is often crucially linked to an individual. Ruler’s support systems Given this growing importance and visibility of contemporary rulers the need to assess the effectiveness of their decisionmaking support in government, and thus their ability to rule, becomes paramount. Yet it is striking to note the weaknesses of the literature on the support and advice infrastructure available to rulers, including most of the formalistic writings on the White House staff and similar material from other countries. In particular, the special problems of advisory staffs, which provide forecasting for rulers, are usually mishandled. Having had the opportunity to visit the offices of more than 30 rulers in a variety of countries, including most of the OECD and a sample from the Third World,’ I have observed that there is quite a variety in the size of staffs, ranging from the very large Prime Ministerial and Cabinet Office in Australia to the few aides serving prime ministers in most European countries. But in all countries, and including the White House in the USA, the ruler’s support services demonstrated a number of pronounced weaknesses. Scarcity of advanced forecasting aids is prominent among these. Despite the obvious dependence of important decisions on the rulers’ images of the future and of the future consequences of their decisions, and despite the long ‘history of intelligence services and their inputs into top level decisionmaking, the gap between forecasting actually available to rulers and the potential of forecasting as an aid to decisionmaking by rulers is large. This conclusion is not the result of an overoptimistic view of the potential of forecasting in this respect, but rather of the failure of contemporary government support services to utilize the little which can be supplied by sophisticated forecasting. Indeed, the weakness of forecasting available to rulers constitutes a clear-cut case of the obsolescence of contemporary governmental systems. At the same time it also illustrates the underdevelopment of forecasting as a professional activity and pinpoints some of its present inadequacies in assumptions, methodologies and techniques. Rulers as ‘fuzzy gamblers’ To assess correctly the present state of forecasting and its potential for rulers, it is useful to construct an image of rulers as ‘fuzzy gamblers’. By ‘fuzzy gambling’ it is meant that decisionmaking, especially on issues which directly confront rulers, is faced by such indeterminacy, even radical ignorance, rooted
FUTURES August 1983
in the shape of the material on which decisions are made and in the environments in which they are taken. It suffices to mention oil prices, events in the Middle East, the results of forthcoming elections and the performance of the economy; these crucial and dynamic features of the real world illustrate the difficulties inherent in allocating future probabilities, and the imagination that is needed for, at the very minimum, speculating on possibilities. Therefore, decisionmaking, especially with regard to problems facing rulers (but not exclusively so), can be viewed as gambling, with the rules of the gamble being inconstant and rarely fully understandable. This analysis of the nature and intensity of uncertainties facing many high-level decision has far-reaching implications for forecasters and points to the need for a reconsideration of the basis of the forecasting activity. Thus it can be said that the allocation of subjective probabilities in forecasting is more often an illusion of help rather than a justified aid to decisionmaking; the present mathematics of probabilities is inadequate-eg in not distinguishing between quantitative and qualitative uncertainty when possibilities can or cannot be sketched respectively; and the very functions of forecasting and intelligence must be partly redefined and aimed at reducing, identifying and patterning ignorance and uncertainty. In this respect, examination of the potential of forecasting for rulers constitutes an important test case for forecasting as a professional endeavour, pinpointing as it does the uncertainty and ignorance in high-level issues that tend to be ignored or repressed by a lot of forecasting methods, especially of the quantitative type. Leaving aside the question of whether ‘fuzzy gambling’ is a consequence of structural uncertainty in a period of social, political and economic flux or a result of the limitations of the human mind in recognizing complex patterns, the pragmatic correctness of viewing much decisionmaking by rulers as ‘fuzzy gambling’ seems justified. It serves as a basis for assessing the present quality of forecasting available to rulers and the potential for its improvement.
Rulers as ‘handicapped gamblers’ An additional feature of decisionmaking by rulers should be noted. Not only they are also ‘handicapped gamblers’, suffering are they ‘fuzzy gamblers’, from a number of incapacities, albeit varied, inbuilt into the very fabric of rulership. In particular, rulers are ‘handicapped gamblers’ as follows: 0
0
0
Rulers are subjected to distorted information inputs, as a result of court politics and bureaucratic politics, and of individuals or concerns trying to gain their support. Rulers receive undue amounts of positive feedback because of the deference, even fear, which their positions inspire, and which interferes with their learning capacity. In particular, iconoclasm and heterodoxy even within entrusted teams of advisers tend to be rare. These factors reinforce and accelerate the usual weaknesses of human beings in handling uncertainty, as illustrated by recent studies in the psychology of decisionmaking.
FUTURES August 1983
Forecmtingfor rulers 249
This is only a sample of the handicaps of rulers to which many more could be and implications of strain and stress related added, viz effects of ‘groupthink’, In short, rulers suffer from gambling to the problems of ‘fuzzy gambling’. incapacities and ‘spoilers’ inbuilt into their roles. Such handicaps add to the challenges faced by forecasting for rulers.
Specifications for forecasting for rulers To consider some specifications for forecasting for rulers based on the above analysis, the first point to be emphasized is that forecasting cannot ‘un-gamble’ decisionmaking by rulers. Qualitative uncertainty and ignorance are inherent in many of the problems they face; therefore, no method can eliminate the ‘fuzzy gambling’ dimensions of decisionmaking. Indeed, efforts to do so are a major fault of much contemporary forecasting, which ignores and represses ignorance and radical uncertainty, often under the pressure of rulers who want to ease their load in decisionmaking. Instead of the repression of objective uncertainty and its displacement by illusions of subjective certainty and quantified risk, a main function of forecasting is to educate rulers to the realities of the situation, namely that they inevitably must engage in gambling with large stakes. Having worked with a number of rulers, it should be said that this is a very hard endeavour indeed. There is a danger of over-reaction, of rulers justifying improvisation as a strategy for facing ignorance and qualitative uncertainty. Hence, forecasting cannot limit itself to explicating ignorance and uncertainty, but must also explore appropriate strategies for improving ‘fuzzy gambling’. Here, cooperation is needed between forecasting and advanced decision strategies. These two are distinct endeavours analytically, but necessarily strongly connected in the practical context of aiding top-level decisionmaking. Hand in hand with educating rulers to appreciate the ‘fuzzy gambling’ nature of decisionmaking and cooperating in evolving suitable decision strategies, forecasting can and should pattern uncertainty (in the sense of mapping main uncertainties as qualitative), risk, and ignorance (ignorance in the sense that one cannot know what one does not know). Patterning uncertainty instead of reducing it -this is a main perspective on forecasting needed to serve high-level decisionmaking. A third main function of forecasting as a gambling aid for rulers is to improve decisionmaking in the face of extreme uncertainty, through ‘debugging’ -ie reducing widespread mistakes, as revealed increasingly by studies in the psychology of decisionmaking. Debugging should deal with mistaken behaviour in the face of uncertainty by top decisionmakers, such as: a wrong belief in personal capacity to control chance; arbitrary jumps between different lottery values; persistence in misdiagnosis of realities in the face of contradictory evidence and so on. These functions of forecasting for rulers, supplemented by others, do not eliminate more traditional approaches which try to reduce uncertainty, such as by allocating subjective probabilities. But, such approaches are relegated to a relatively small corner of decisionmaking by rulers. FUTURES August 1993
Structural
implications
Traditional inputs to the paperflow to rulers, such as standard intelligence estimates, cannot fulfil the functions of forecasting for rulers as indicated above. Only if sophisticated professional forecasters are an integral part of the close advisory staffs of rulers and only if a suitable form of introducing forecasting into the thinking of rulers, such as through multi-media presentations, can be utilized, is there a chance to realize some of the proposed specifications of the close interdependency between forecasting for rulers. In particular, appropriate decision strategies, patterned uncertainty and the application of both to concrete decision issues, make integration of sophisticated forecasting professionals into the close advisory staffs of rulers necessary. A precondition for moving in such a direction requires quite a transformation in forecasting knowledge and forecasting professionals themselves. A shift from an emphasis on quantitative approaches to heuristic aids for ‘fuzzy in forecasting philosophy and forecasting methodology, and gambling’, development of sophisticated professionals who apply heuristic aids to policy gambling-these are essential for upgrading forecasting so that it can help in handling the crucial issues facing societies now and in the foreseeable future, inter alia by forecasting for rulers. 2 Footnote 1. Regretfully, I could not visit rulers’ offices in communist countries and no reliable information on the staff exists in the literature. 2. For full development of the ideas hinted at in this paper, see Yehezkel Dror, Policymaking Under Adversity (New Brunswick, NJ, Transaction Books, 1984, forthcoming); and Yehezkel Dror, AdvancedAidsfor Top Decisionmaking: An Action Approach (Paris, OECD, 1983, forthcoming).
FUTURES August 1983