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MEMO FOR SYSTEM-REFORMING RULERS Yehezkel Dror
This article examines some major problems of system reform from the top and presents improvement recommendations. Weakness in goal conceptions requires grand designs. Because of the long time that it takes to get results, staying power should be strengthened and promise of rapid benefits avoided. Turbulence is endemic to system reform, requiring use of robust 'locomotives of change' together with delineation of red lines beyond which disturbance is contained. Paradoxical processes pose catches making system reforms 'gambles with history', requiring a mix between consistency and learning. To overcome resistance and inertia, the building up of power concentrations is essential. To handle such system-reform problematics, special decision supports are proposed. Because system reform by rulers is an important mode of influencing the future, the subject is recommended as a focus for further study and improvement.
One of the most interesting and significant futures-influencing activities is system reform by rulers to revamp central societal institutions. History is loaded with such attempts at large-scale social architecture--with some successful achievements as well as many dismal failures, in terms of both immediate results and historical impact. The USSR and the People's Republic of China, and, in a different vein, Khomeini's Iran, illustrate radical contemporary attempts at system reform from the top. Accelerated integration of the European Common Market is also a system reform. Less extreme, but still significant, endeavours of this type are widespread in less developed as well as in highly industrialized countries, both democratic and authoritarian. System-reforming rulers are necessary under some conditions, humanistic and simplistic mass-democratic hopes to the contrary. When radical shifts in social structures, based on thinking in terms of historical processes, are needed in the face of strong opposition and current pressures, reform from the top may be essential. To crystallize realistic visions and long-range
Yehezkel Dror is Professor of Political Science and Public Administration at the Hebrew University of Jerusalem, Mount Scopus, Jerusalem, Israel 91905, and an international adviser on policy planning. He is a member of Futures's advisory board.
0016-3287/89/040334-10503.00(~ 1989 Butterworth & Co (Publishers) Ltd
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grand policies, to relate present choices to social time, to provide coherent guidelines to fragmented governments, to innovate policies in the face of inertia, to achieve power concentrations adequate for 'constructive destruction'--reform from the top may often be essential to meet all these and additional requirements. Many people are involved in directing reform from the top, especially in complex societies. But, as I put it at a conference in Beijing, paraphrasing Winston Churchill, 'seldom in history does the future of so many depend on so few'. In democracies also which are engaging in reform from the top, very few people make the important decisions, as illustrated by the UK under the current government of Prime Minister Thatcher. Therefore, so far as state action makes a difference, system reform by rulers constitutes one of the more significant forms of human endeavour deliberately to influence the future. System-reforming rulers need unavailable help System reform by rulers is a difficult endeavour. Leaving aside for separate consideration the performance-corrupting effects of power concentrations, the substantive problematics of system reform are mind-boggling. Therefore, helping to improve the performance of system-reforming rulers, who, in the terminology of Sydney Hook, try to change conditions rather than perform within them, 1 is an important practical need. Assuming a ruler wants to engage in system reform, is in an initial position to do so, and has some general notions about the direction in which to move (eg, such as the path proposed in Gorbachev's perestroika2), he requires a lot of professional help. But, looking around the existing disciplines, literature and professionals, there is nowhere to turn to for what he needs most. Economists can help with economic issues; organizational consultants can provide some ideas on micro-institutional reforms; political philosophers may help with ideas on desirable political structures, given one or another value base; and so on. Various specialists can give advice on particular facets of reform, but no presently existing discipline nor profession deals with system reform as a whole. To supply professional help with system reform is not an impossible mission. History is replete with material on which useful generalizations can be based; and available dispersed knowledge can provide insights applicable to system reform from the top. But present disciplines and professions are not oriented towards this task. System reform is not a recognized domain of study. And, worse still, the idea of developing knowledge useful for rulers, in line with the classical literary genre of 'Mirrors for Princes', is anathema to present communities of scholars. Here is a lacuna posing a major challenge to futures planners. To provide professional help with system reforms which are acceptable in terms of values (not a Hitler's Mein Kampf) poses a major challenge to futures planners and related proto-disciplines, such as the policy sciences. Such concerns are central to the main line of my work. The recommendations for system-reforming rulers presented in this memo are proferred as a preliminary contribution to a major practical need facing quite a few countries and rulers. They are also intended to illustrate the possibilities for
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and problems of building up a body of theoretical and applied knowledge and a profession of 'statecraft', together with offering further neo-Platonic ideas on an 'Academy for Rulers, Top Policy-makers and Senior Policy Advisers'. I am aware of the seriousness and also hubris of the endeavour. But, without some intellectual daring, little can be done to help professionally with critical system reforms. In trying to take up the challenge, this memo considers some major problems facing system-reforming rulers, and offers recommendations for dealing better with them. The analysis and recommendations are based on broad historical studies, multiple forms of policy reasoning, and diverse social science, humanities and futures studies disciplines, on the one hand, and on extensive work with many governments and some rulers on system reforms, on the other. The ideas are presented in a pointillist manner, as a preliminary contribution to dealing with pressing problems, as an aperitif to more extensive work, 3 and to demonstrate the prima facie feasibility of building up a disciplineprofession of 'statecraft', including system reform. Problems and recommendations
Moving on to substantive issues facing system-reforming rulers, I briefly evaluate five major problems and present a few recommendations. Goal conceptions are weak Problem. Detailed blueprints for the future are unacceptable as guides to action, because of uncertainty and the dangers of causing closed minds. Yet in order to engage in effective system reform, more is required than merely a general notion, a vague vision or a dream, however important these are. System reform, as distinct from some types of revolution for instance, is characterized by action oriented at partly operationalized goals, including structured goal seeking. This requires goal conceptions which are openended and elastic, but which are not empty and do cover in outline the main dimensions of desired states of the future. Weaknesses in goal conception are a main failing of system reform, causing a preponderance of counter-productive effects. To give an illustration, some Latin American states engage in diluted versions of system reform. But, after quite diligent visits to those countries, I failed to find in any of them a realistic notion on employment patterns for the population in say 20 to 30 years' time. Such neglect cannot but aggravate problems which may destroy major reform policies. Let me make myself clear: as explained below, neither a comprehensive plan nor some similar monstrosity is advocated. But oscillation between over-detailed multi-year plans on the one hand, and the lack of goal conceptualization on the other, are a main source of weakness of system reform. Recommendation. Outline 'grand designs' of desired futures with a time perspective of say 20 to 50 years are essential, on the level of 'realistic visions'. Such desired grand designs should be supplemented with some
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exploration of the negative futures to be avoided. A variety of methods developed in futures studies can be of help in constructing suitable grand designs and including in them the essential dimensions, so long as inappropriate quantification, over-detail, and any search for 'comprehensive plans', are avoided. The work on Japan Towards the 21st Century 4 illustrates the possibilities for developing useful grand designs which still take account of uncertainty in a sophisticated way, as has been recommended. Grand designs, as proposed here, need periodic revision. Nevertheless, they do provide an anchor to system reform and offer, at the operational level, a compass, helping to handle many difficulties including those discussed in this memo. Thus, grand designs can help to improve policy consistency and to mobilize support. But it is essential that the grand designs on which system reform is based should be of a high quality, such as by keeping a balance between means and ends, preserving elasticity and encouraging innovation throughout the reform. A bad grand design is much worse than having none at all. Hence, the need for high-quality work in developing the grand design and in revising it, which require outstanding professional inputs in addition to political vision and will. System reform takes a long time Problem. By its very nature, system reform takes a long time, involving 'social' rather than 'human' time. s One can speak metaphorically about the half-life time of existing institutions, which seems to move between 20 years to generations. Only when technological short-cuts are introduced, such as the Green rice revolution, do results follow rapidly. But when attempts are made to transform socioeconomic and political systems, such as in the USSR and the PRC, achievement of significant improvements will easily take 20-30 years. Similarly, large-scale land reforms can take 10-30 years to succeed, if everything goes relatively smoothly, which seldom happens. Recommendations. Therefore, system-reforming rulers should, first, avoid fooling themselves by expecting fast results. In revolutions, blind belief in quick success may be useful as a self-motivating and support-recruiting illusion. System reforms are a quite different task, in which fooling oneself will spoil action and fooling others will produce boomerang effects, although optimism is essential. Accordingly, system-reforming rulers should also strictly avoid promises which will soon prove empty. On the level of tactics, which I do not consider in this memo, some rapid demonstration successes may be necessary to sustain support. But, for system reform as a whole to succeed, staying power of rulers and main policies is required. Therefore, long-range practical visions are necessary, both as a consistent though elastic and open-ended policy compass, and for recruiting support for a prolonged endeavour. Building up power bases permitting consistent long-term policies is also essential, as discussed below. System reform is turbulent Problem. System reform is at best very turbulent, and often in part jumpy
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and even explosive. Once significant changes are introduced into major social processes and institutions, many accumulated tensions will be released, unexpected mutations will occur and chaotic phenomena will multiply. In large countries, loss of control over the periphery often takes place. Therefore, any hope for a smooth curve of progress is a dangerous delusion, fine tuning is an impossibility, 'comprehensive planning' is a fata morgana, and loss of control becomes a distinct prospect. Recommendations. Again, the first recommendation is for the ruler and his 'Central Mind of Government' to know what to expect and also to explain it to his main supporters, so that he and his aides are not shocked and disoriented by turbulence, and his supporters do not mistake turbulence for failure. The next recommendation is to adopt a system-changing strategy of process initiation and of introducing 'locomotives of change', and even shock effects, 6 rather than striving for 'balanced change'. This is a cardinal system-reform grand strategy, which must be followed against the predilections of various traditional 'planning' schemata and professionals. The third recommendation is to impose some 'red lines' beyond which turbulence will not be tolerated, because it may endanger the systemreform endeavour as a whole. To take an illustration from the USSR, nationalistic movements and far-reaching demands for political reform should probably be contained, so as not to risk the main lines of perestroika. Similarly, in the PRC, limitations should be imposed on the behaviour of the provinces in contradicting central directives. Clear explanation in advance of essential red lines and strict action to establish their credibility from the beginning will save a lot of trouble later on. This requires both building up a strong monitoring and enforcement machinery, and outstanding crisis decision-making capacities. Paradoxical processes pose inescapable catches Problem. Basic difficulties of system reform stem from built-in paradoxes which pose hard-to-handle catches, and which also produce many undesired consequences. Two examples will clarify this point, which must be examined within the concrete context of specific system reforms. There is a critical need to control population increases in the PRC, requiring farreaching intervention with regard to family decisions and the imposition of mainly economic penalties for transgressions. But all promising avenues of system reform in the PRC require at least some relaxation of central controls and the encouragement of economic effort and initiative. It is nearly impossible both to maintain strict control over family planning behaviour and to encourage self-motivated economic behaviour. Also, with increasing income produced by economic incentives, especially in agriculture, the penalties for having additional children lose their effects, while the economic value of additional children increases. As a result, paradoxically some of the very successes of the system reform disrupt birth control, endangering the system reform as a whole. Many additional catches built into system-reform attempts can be cited,
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such as growing corruption resulting from upgrading the importance of economic incentives, and relaxation of some constraints producing overdemand, paradoxically increasing dissatisfaction. In a more pessimistic, but no less realistic mood, ironies of history must be mentioned, with some system reforms producing the converse of what is intended, because of dialectic processes that are hard to comprehend in conventional policy reasoning. Recommendations. My first recommendation again deals with the reformers' modes of thinking, because sophisticated understanding by them of the deeper dynamics involved in system reform is a sine qua non for improved action. To put it in a nutshell, system reforms are 'gambles with history', constituting interventions with little understood and largely nondeterministic processes, carrying a high probability of surprise events and unexpected, undesirable results. Therefore, system reform with all its risks is justified only when present situations are unacceptable, trends are for the worse and decline is expected. As such conditions are widespread, system reform as a carefully chosen activity is often necessary, despite its nature as 'policy gambling'. 7 But correct understanding of its nature is essential, both in order to decide correctly when to engage in system reform and for managing such endeavours better. For instance, all available methods for improving policy gambling and for better handling irreducible uncertainties must be included in the toolkit of system reformers. The second recommendation involves the appropriate mix between policy consistency and learning. Unless main system-reform policies are consistently maintained and on-off oscillations are avoided, the endeavour as a whole will be spoilt. But constant learning is essential and tactics, as well as some strategies, must be adjusted to unfolding realities. Chinese dilemmas in price control well illustrate the difficulty of combining policy consistency and the handling of current difficulties. My general impression is that, while governmental learning is scarce and takes time, maintaining consistent reform policies despite immediate difficulties is even harder. While overadjustment to current difficulties is a main danger, lack of adequate learning and of the propensity to handle novel problems with 'more of the same' are also serious pitfalls. The emotions tied in to system reform, up to intense, 'motivated irrationality', 8 further aggravate learning difficulties. Hence, the need to institutionalize monitoring and learning, as an important institutional requirement of system reform. The fundamental issue of time preferences in system reform is sharpened by the presently considered problematics. System reform requires a readiness and an ability to pay large prices in the present and near future in order to gain larger benefits in the longer-term future. The capacity to accept present sacrifices for the sake of the future is made all the more necessary when one takes into account that system reform unavoidably involves 'constructive destruction'. 9 Therefore, a main recommendation is not to be very sensitive to short-run costs when engaging in system reform. But to follow this recommendation a power base strong enough to withstand current pressures is essential, as is being strong-willed and having a philosophy of leadership which accepts present sufferings for the sake of a hopefully better but uncertain future.
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Resistance and inertia Problem. A major pathology of system reform is underrating resistance. As was well understood by Machiavelli, the tyranny of the status quo 1° is very strong. System reform endangers present elites, networks of interests and habits, and power structures. Therefore, strenuous resistance must be expected and overcome. Successful system reform often takes place after traumatic events which undermine institutions, such as domestic upheavals, losing a large war, foreign occupation, massive economic crises etc. 11 The greatest difficulty is posed when slowly descending curves which amount to overall decline require system reform, but are too gradual to shock the system into turbulence which reduces rigidities and which, paradoxically, opens up opportunities for system reform. When organizational inertia is added to active resistance by endangered power structures, a main catch of system reform arises: for system reform in complex societies, organizations are an essential instrument. But, the inertia of existing organizations renders them a major barrier to system reform, while their substitution by other organizations is nearly impossible and, even if partly feasible, involves transition costs which endanger the system reform. The problem can be summed up by my conclusion from a study of the history of system-reform efforts, namely that unless main decision makers and power holders are changed, radical system reforms have little chance of success. But changing main decision makers and power holders is very difficult, because of their resistance and often also because of the scarcity of alternative qualified candidates. Recommendations. Four main interrelated strategies are available to cope with inertia and resistance to system reform. The first involves waiting for history to provide shocks which open up opportunities for system reform, or actively adopting a phased approach, with shock effects being introduced first to destabilize reality, reduce resistance and increase innovation propensities. The second strategy limits the reform to the minimum critical mass and proceeds in modules. The third involves mobilization of support from existing power structures. The fourth requires building up alternative power bases, organizations and elites. Successful system reform requires a mix of these four main strategies, all of which are demanding and risky. Waiting for catastrophe to prepare the ground for system reform is a strategy of last resort. If nothing can be done to reform a system before it fails, I recommend having designs for reform ready for implementation when the system is shocked. Historically, this has often been the case, with high costs and many failures. Prescriptively preventative reform is obviously greatly preferable. The second variation of this strategy is to engage in deliberate destabilization, in order to make radical reform feasible. This is a dangerous strategy and often an impossible one. Limited wars have sometimes been initiated to facilitate internal reforms, but this is unacceptable now. Instigation of controlled economic crisis to prepare the ground for structural reforms is also unacceptable both in terms of values and politically in modern societies. Still, in some cases controlled destabilization
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followed by system reform is preferable to irreversible decline and perhaps catastrophe if the system is not reformed. Limiting reform to a minimum critical mass is related to the earlier recommendation to advance with 'locomotives of change', which also uses economically limited reform resources. The recommendation is to adopt a measure of intervention, in modules, which moves the system in desired directions with a minimum of essential effort. In this way less resistance is produced (and less scarce system-reform resources are needed) than in larger-scale action. The problem of minimum necessary scale must still be faced. My own tentative study of system reforms leads to the conjecture that often the minimum critical mass is of quite large a scale. 12 When this is correct, the potentials of the strategy of reducing reforms to the essentials are limited and efforts to minimize resistance leading to reduction of reform efforts below the critical mass will ruin the reform as a whole. Thus, it may well be that in order to transform the USSR and PRC into high-tech societies far-reaching political reforms are essential--though not necessarily in the direction of Western democracy--in addition to economic and administrative transformations, even if this multiplies resistance. Gaining the support of existing organizations and power structures often involves compromising the essence of system reform and can easily become self-defying. Land reforms are often a case in point, buying the agreement of land owners being so expensive as to be impossible, and giving in to their demands making meaningful reform impossible. Still, purchasing agreement may often be the cheapest of all strategies. Thus, preserving the material privileges of main elites, even when their power is reduced, may be a recommended strategy for handling at least parts of the nomenclatura.
Another version of the third strategy is to build a new coalition of presently powerful actors and to convince it of the necessity for system reform. If stark realities make the need for system reform highly visible, if shared values and ideologies provide a strong basis for agreed sacrifices and efforts, and if the costs to main coalition partners can be limited and distributed in ways perceived as equitable, then achieving consensus on system reform by an adequate coalition of powers is feasible. The alternative and last strategy is to build up new power bases, such as by mobilizing mass support to overcome conservative elites. 13 This may work in democracies, where electoral processes are highly developed and provide a mechanism for translating mass support into political power adequate to enforce thorough-going reforms. But when no institutionalized channels for translating mass support into legitimized political power exits, appeal to the masses will often produce demands and movements which, in turn, will undermine the system reform by asking for more than can be delivered and then becoming apathetic or turning against the reformers. In addition unstructured mass action will produce turbulence which easily gets out of control and stimulates counter-reform. Different combinations of these strategies may meet needs. But, my own impression is that system reform requires changing at least some of the higher decision makers, executives and elites. Hence, the need for power which permits this, including ultimately support by the armed forces. When
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democratic mass support or national consensus coalitions cannot be relied upon, there is no escape from the recommendation of having a reserve of force available to deter resistance, to rotate elites and to implement other essential elements of system reform which generate much hostility and resistance. In addition to strategies for concentrating power essential for system reform, personnel to take over positions must be prepared. Therefore, intense cadre training is essential. On the higher level, some kind of 'National Policy College' where top policy makers and policy influencers study main reform issues and crystallize informed opinions on main strategies is recommended. System reform decision supports
The challenges of system reform, as partly indicated by the five problem areas looked at above, require outstanding staffs for rulers and their colleagues. Fully to elaborate necessary supports requires another memo. But four recommendations can serve to illustrate the nature of required system-reform decision supports, as a conclusion to this memo. First, outstanding strategic thinking capacities are essential, working constantly on deep analysis of main system-reform issues. Advanced versions of policy R&D organizations, so-called 'Think Tanks', are needed to do so. These should work at arm's length from the rulers, so as to avoid the heat of the corridors of power and to be able to engage in iconoclasm and innovation. Second, personal offices of the ruler must be equipped with units engaging in high-level staff work, to relate current decisions to basic system-reform strategies, including necessary crisis decision-making. Outstanding professional islands of excellence working with the ruler are the single most important component of adequate system-reform decision supports. But, because of problems of interface with the ruler on one hand and subjection to political, bureaucratic and other pressures on the other, advisory units to rulers are very difficult to design and maintain. 14 The need to counteract 'motivated irrationalities 'is which are widespread among system-reforming rulers and also of some use in maintaining necessary optimism, as already noted, illustrates the difficult tasks of such units. Third, monitoring and evaluation of system-reform effects by independent agencies, reporting only to the ruler and his units, are essential. Without reliable intelligence on the reform and related variables, learning is impossible. Only agencies not involved in reform decisions and implementation can provide relatively unbiased information and evaluation. Therefore, setting up independent and separate system-reform monitoring and evaluation agencies is recommended. Fourth, and last in this breviary, is the need for top-quality professionals in system-reform policy planning to staff advisory units for the ruler and related agencies, as a distinct part of the cadre training mentioned above. Intense preparation of such professionals, partly on a crash-course basis, is essential for successful system reform in the complex conditions of the modern world. The last recommendation returns us to the lack of disciplines and
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professionals focusing on system reform, as mentioned at the beginning of this memo. Building up relevant knowledge and educating a new breed of professionals emerge as a cardinal mission for improving human endeavours to try and influence the future for the better, of which system reform by rulers is an important, though fragile, form. Notes and references
1. See Sidney Hook, The Hero in History: A Study in Limitation and Possibifity (New York, Day, 1943). 2. Mikhail Gorbachev, Perestroika: New Thinking for Our Country and the World (London, Collins, 1987), as far as I could find out, is unique as a book written by a head of state, at the beginning of his rule, which diagnoses his country as being in decline. 3. The line of reasoning underlying this memo is fully worked out and applied to a concrete setting in: Yehezkel Dror, Memorandum for the Israefi Prime Minister, Vol I, Situation of the Nation; Vol II, State Building; Vol III, Raison de Zionism; Vol IV, Breakthrough Grand-Poficies (Jerusalem, Academon, 1989, in Hebrew). The approach as a whole will be presented in Yehezkel Dror, On Rufing: A Policy Mirror for Captains-of-State (in work). 4. NIRA, Japan Towards the 21st Century (Tokyo, National Institute for Research Advancement, 1979), reflects only very small parts of the work, most of which has not been published in Japan either. 5. Important to apply to policy making, with a number of necessary adjustments, is the distinction made by the French Annals school of history between various time dimensions. In that terminology, a main problem of system reform is the need to fit action located in human time to social time processes. For an introduction into salient Annals thinking see, for instance, Fernand Braudel, On History (Chicago, IL, University of Chicago Press, 1980). 6. Recommended is the approach mainly developed by Albert- Hirschman. A convenient updating summary is provided in Albert O. Hirschman, Rival Views of Market Society (New York, Viking, 1986), especially chapters 1-3. 7. On the concept of 'policy gambling', see Yehezkel Dror, Policymaking Under Adversity (New Brunswick, NJ, Transaction, 1986, paperback 1988), especially pages 167-176. Appropriate methods are discussed in Yehezkel Dror, 'Uncertainty: Coping with It and with Political Feasibility', in Hugh J. Miser and Edward S. Quade, eds, Handbook of Systems Analysis: Craft Issues and Procedural Choices (New York, North-Holland, 1988), pages 247281. 8. For this striking concept, see David Pears, Motivated Irrationality (Oxford, Clarendon Press, 1984). 9. See Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York, Harper, 1953), chapter 7. 10. For this formulation, see Milton and Rose Friedman, Tyranny of the Status Quo (New York, Harcourt Brace Jovanovich, 1984). 11. Relevant is the main argument in Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (New Haven, CT, Yale University Press, 1982). 12. See Paul R. Schulman, Large-Scale Policy Making (New York, Elsevier, 1980). 13. Very stimulating in this respect is Roberto Mangabeira Unger, Plasticity into Power: Comparative-Historical Studies on the Institutional Conditions of Economic and Military Success--Variations on Themes of Pofitics, a Work in Constructive Theory (Cambridge, Cambridge University Press, 1987), especially part 3. 14. Compare, for instance, William Plowden, ed, Advising the Rulers (Oxford, Basil Blackwell, 1987); and Tessa Blackstone and William PIowden, Inside the Think Tank: Advising the Cabinet 1971-1983 (London, William Heinemann, 1988). 15. Pears, op cit, reference 8.
FUTURES August 1989
MEMO FOR SYSTEM-REFORMING RULERS Yehezkel Dror
This article examines some major problems of system reform from the top and presents improvement recommendations. Weakness in goal conceptions requires grand designs. Because of the long time that it takes to get results, staying power should be strengthened and promise of rapid benefits avoided. Turbulence is endemic to system reform, requiring use of robust 'locomotives of change' together with delineation of red lines beyond which disturbance is contained. Paradoxical processes pose catches making system reforms 'gambles with history', requiring a mix between consistency and learning. To overcome resistance and inertia, the building up of power concentrations is essential. To handle such system-reform problematics, special decision supports are proposed. Because system reform by rulers is an important mode of influencing the future, the subject is recommended as a focus for further study and improvement.
One of the most interesting and significant futures-influencing activities is system reform by rulers to revamp central societal institutions. History is loaded with such attempts at large-scale social architecture--with some successful achievements as well as many dismal failures, in terms of both immediate results and historical impact. The USSR and the People's Republic of China, and, in a different vein, Khomeini's Iran, illustrate radical contemporary attempts at system reform from the top. Accelerated integration of the European Common Market is also a system reform. Less extreme, but still significant, endeavours of this type are widespread in less developed as well as in highly industrialized countries, both democratic and authoritarian. System-reforming rulers are necessary under some conditions, humanistic and simplistic mass-democratic hopes to the contrary. When radical shifts in social structures, based on thinking in terms of historical processes, are needed in the face of strong opposition and current pressures, reform from the top may be essential. To crystallize realistic visions and long-range
Yehezkel Dror is Professor of Political Science and Public Administration at the Hebrew University of Jerusalem, Mount Scopus, Jerusalem, Israel 91905, and an international adviser on policy planning. He is a member of Futures's advisory board.
0016-3287/89/040334-10503.00(~ 1989 Butterworth & Co (Publishers) Ltd
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Memo for system-reforming rulers 335
grand policies, to relate present choices to social time, to provide coherent guidelines to fragmented governments, to innovate policies in the face of inertia, to achieve power concentrations adequate for 'constructive destruction'--reform from the top may often be essential to meet all these and additional requirements. Many people are involved in directing reform from the top, especially in complex societies. But, as I put it at a conference in Beijing, paraphrasing Winston Churchill, 'seldom in history does the future of so many depend on so few'. In democracies also which are engaging in reform from the top, very few people make the important decisions, as illustrated by the UK under the current government of Prime Minister Thatcher. Therefore, so far as state action makes a difference, system reform by rulers constitutes one of the more significant forms of human endeavour deliberately to influence the future. System-reforming rulers need unavailable help System reform by rulers is a difficult endeavour. Leaving aside for separate consideration the performance-corrupting effects of power concentrations, the substantive problematics of system reform are mind-boggling. Therefore, helping to improve the performance of system-reforming rulers, who, in the terminology of Sydney Hook, try to change conditions rather than perform within them, 1 is an important practical need. Assuming a ruler wants to engage in system reform, is in an initial position to do so, and has some general notions about the direction in which to move (eg, such as the path proposed in Gorbachev's perestroika2), he requires a lot of professional help. But, looking around the existing disciplines, literature and professionals, there is nowhere to turn to for what he needs most. Economists can help with economic issues; organizational consultants can provide some ideas on micro-institutional reforms; political philosophers may help with ideas on desirable political structures, given one or another value base; and so on. Various specialists can give advice on particular facets of reform, but no presently existing discipline nor profession deals with system reform as a whole. To supply professional help with system reform is not an impossible mission. History is replete with material on which useful generalizations can be based; and available dispersed knowledge can provide insights applicable to system reform from the top. But present disciplines and professions are not oriented towards this task. System reform is not a recognized domain of study. And, worse still, the idea of developing knowledge useful for rulers, in line with the classical literary genre of 'Mirrors for Princes', is anathema to present communities of scholars. Here is a lacuna posing a major challenge to futures planners. To provide professional help with system reforms which are acceptable in terms of values (not a Hitler's Mein Kampf) poses a major challenge to futures planners and related proto-disciplines, such as the policy sciences. Such concerns are central to the main line of my work. The recommendations for system-reforming rulers presented in this memo are proferred as a preliminary contribution to a major practical need facing quite a few countries and rulers. They are also intended to illustrate the possibilities for
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and problems of building up a body of theoretical and applied knowledge and a profession of 'statecraft', together with offering further neo-Platonic ideas on an 'Academy for Rulers, Top Policy-makers and Senior Policy Advisers'. I am aware of the seriousness and also hubris of the endeavour. But, without some intellectual daring, little can be done to help professionally with critical system reforms. In trying to take up the challenge, this memo considers some major problems facing system-reforming rulers, and offers recommendations for dealing better with them. The analysis and recommendations are based on broad historical studies, multiple forms of policy reasoning, and diverse social science, humanities and futures studies disciplines, on the one hand, and on extensive work with many governments and some rulers on system reforms, on the other. The ideas are presented in a pointillist manner, as a preliminary contribution to dealing with pressing problems, as an aperitif to more extensive work, 3 and to demonstrate the prima facie feasibility of building up a disciplineprofession of 'statecraft', including system reform. Problems and recommendations
Moving on to substantive issues facing system-reforming rulers, I briefly evaluate five major problems and present a few recommendations. Goal conceptions are weak Problem. Detailed blueprints for the future are unacceptable as guides to action, because of uncertainty and the dangers of causing closed minds. Yet in order to engage in effective system reform, more is required than merely a general notion, a vague vision or a dream, however important these are. System reform, as distinct from some types of revolution for instance, is characterized by action oriented at partly operationalized goals, including structured goal seeking. This requires goal conceptions which are openended and elastic, but which are not empty and do cover in outline the main dimensions of desired states of the future. Weaknesses in goal conception are a main failing of system reform, causing a preponderance of counter-productive effects. To give an illustration, some Latin American states engage in diluted versions of system reform. But, after quite diligent visits to those countries, I failed to find in any of them a realistic notion on employment patterns for the population in say 20 to 30 years' time. Such neglect cannot but aggravate problems which may destroy major reform policies. Let me make myself clear: as explained below, neither a comprehensive plan nor some similar monstrosity is advocated. But oscillation between over-detailed multi-year plans on the one hand, and the lack of goal conceptualization on the other, are a main source of weakness of system reform. Recommendation. Outline 'grand designs' of desired futures with a time perspective of say 20 to 50 years are essential, on the level of 'realistic visions'. Such desired grand designs should be supplemented with some
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exploration of the negative futures to be avoided. A variety of methods developed in futures studies can be of help in constructing suitable grand designs and including in them the essential dimensions, so long as inappropriate quantification, over-detail, and any search for 'comprehensive plans', are avoided. The work on Japan Towards the 21st Century 4 illustrates the possibilities for developing useful grand designs which still take account of uncertainty in a sophisticated way, as has been recommended. Grand designs, as proposed here, need periodic revision. Nevertheless, they do provide an anchor to system reform and offer, at the operational level, a compass, helping to handle many difficulties including those discussed in this memo. Thus, grand designs can help to improve policy consistency and to mobilize support. But it is essential that the grand designs on which system reform is based should be of a high quality, such as by keeping a balance between means and ends, preserving elasticity and encouraging innovation throughout the reform. A bad grand design is much worse than having none at all. Hence, the need for high-quality work in developing the grand design and in revising it, which require outstanding professional inputs in addition to political vision and will. System reform takes a long time Problem. By its very nature, system reform takes a long time, involving 'social' rather than 'human' time. s One can speak metaphorically about the half-life time of existing institutions, which seems to move between 20 years to generations. Only when technological short-cuts are introduced, such as the Green rice revolution, do results follow rapidly. But when attempts are made to transform socioeconomic and political systems, such as in the USSR and the PRC, achievement of significant improvements will easily take 20-30 years. Similarly, large-scale land reforms can take 10-30 years to succeed, if everything goes relatively smoothly, which seldom happens. Recommendations. Therefore, system-reforming rulers should, first, avoid fooling themselves by expecting fast results. In revolutions, blind belief in quick success may be useful as a self-motivating and support-recruiting illusion. System reforms are a quite different task, in which fooling oneself will spoil action and fooling others will produce boomerang effects, although optimism is essential. Accordingly, system-reforming rulers should also strictly avoid promises which will soon prove empty. On the level of tactics, which I do not consider in this memo, some rapid demonstration successes may be necessary to sustain support. But, for system reform as a whole to succeed, staying power of rulers and main policies is required. Therefore, long-range practical visions are necessary, both as a consistent though elastic and open-ended policy compass, and for recruiting support for a prolonged endeavour. Building up power bases permitting consistent long-term policies is also essential, as discussed below. System reform is turbulent Problem. System reform is at best very turbulent, and often in part jumpy
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and even explosive. Once significant changes are introduced into major social processes and institutions, many accumulated tensions will be released, unexpected mutations will occur and chaotic phenomena will multiply. In large countries, loss of control over the periphery often takes place. Therefore, any hope for a smooth curve of progress is a dangerous delusion, fine tuning is an impossibility, 'comprehensive planning' is a fata morgana, and loss of control becomes a distinct prospect. Recommendations. Again, the first recommendation is for the ruler and his 'Central Mind of Government' to know what to expect and also to explain it to his main supporters, so that he and his aides are not shocked and disoriented by turbulence, and his supporters do not mistake turbulence for failure. The next recommendation is to adopt a system-changing strategy of process initiation and of introducing 'locomotives of change', and even shock effects, 6 rather than striving for 'balanced change'. This is a cardinal system-reform grand strategy, which must be followed against the predilections of various traditional 'planning' schemata and professionals. The third recommendation is to impose some 'red lines' beyond which turbulence will not be tolerated, because it may endanger the systemreform endeavour as a whole. To take an illustration from the USSR, nationalistic movements and far-reaching demands for political reform should probably be contained, so as not to risk the main lines of perestroika. Similarly, in the PRC, limitations should be imposed on the behaviour of the provinces in contradicting central directives. Clear explanation in advance of essential red lines and strict action to establish their credibility from the beginning will save a lot of trouble later on. This requires both building up a strong monitoring and enforcement machinery, and outstanding crisis decision-making capacities. Paradoxical processes pose inescapable catches Problem. Basic difficulties of system reform stem from built-in paradoxes which pose hard-to-handle catches, and which also produce many undesired consequences. Two examples will clarify this point, which must be examined within the concrete context of specific system reforms. There is a critical need to control population increases in the PRC, requiring farreaching intervention with regard to family decisions and the imposition of mainly economic penalties for transgressions. But all promising avenues of system reform in the PRC require at least some relaxation of central controls and the encouragement of economic effort and initiative. It is nearly impossible both to maintain strict control over family planning behaviour and to encourage self-motivated economic behaviour. Also, with increasing income produced by economic incentives, especially in agriculture, the penalties for having additional children lose their effects, while the economic value of additional children increases. As a result, paradoxically some of the very successes of the system reform disrupt birth control, endangering the system reform as a whole. Many additional catches built into system-reform attempts can be cited,
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such as growing corruption resulting from upgrading the importance of economic incentives, and relaxation of some constraints producing overdemand, paradoxically increasing dissatisfaction. In a more pessimistic, but no less realistic mood, ironies of history must be mentioned, with some system reforms producing the converse of what is intended, because of dialectic processes that are hard to comprehend in conventional policy reasoning. Recommendations. My first recommendation again deals with the reformers' modes of thinking, because sophisticated understanding by them of the deeper dynamics involved in system reform is a sine qua non for improved action. To put it in a nutshell, system reforms are 'gambles with history', constituting interventions with little understood and largely nondeterministic processes, carrying a high probability of surprise events and unexpected, undesirable results. Therefore, system reform with all its risks is justified only when present situations are unacceptable, trends are for the worse and decline is expected. As such conditions are widespread, system reform as a carefully chosen activity is often necessary, despite its nature as 'policy gambling'. 7 But correct understanding of its nature is essential, both in order to decide correctly when to engage in system reform and for managing such endeavours better. For instance, all available methods for improving policy gambling and for better handling irreducible uncertainties must be included in the toolkit of system reformers. The second recommendation involves the appropriate mix between policy consistency and learning. Unless main system-reform policies are consistently maintained and on-off oscillations are avoided, the endeavour as a whole will be spoilt. But constant learning is essential and tactics, as well as some strategies, must be adjusted to unfolding realities. Chinese dilemmas in price control well illustrate the difficulty of combining policy consistency and the handling of current difficulties. My general impression is that, while governmental learning is scarce and takes time, maintaining consistent reform policies despite immediate difficulties is even harder. While overadjustment to current difficulties is a main danger, lack of adequate learning and of the propensity to handle novel problems with 'more of the same' are also serious pitfalls. The emotions tied in to system reform, up to intense, 'motivated irrationality', 8 further aggravate learning difficulties. Hence, the need to institutionalize monitoring and learning, as an important institutional requirement of system reform. The fundamental issue of time preferences in system reform is sharpened by the presently considered problematics. System reform requires a readiness and an ability to pay large prices in the present and near future in order to gain larger benefits in the longer-term future. The capacity to accept present sacrifices for the sake of the future is made all the more necessary when one takes into account that system reform unavoidably involves 'constructive destruction'. 9 Therefore, a main recommendation is not to be very sensitive to short-run costs when engaging in system reform. But to follow this recommendation a power base strong enough to withstand current pressures is essential, as is being strong-willed and having a philosophy of leadership which accepts present sufferings for the sake of a hopefully better but uncertain future.
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Resistance and inertia Problem. A major pathology of system reform is underrating resistance. As was well understood by Machiavelli, the tyranny of the status quo 1° is very strong. System reform endangers present elites, networks of interests and habits, and power structures. Therefore, strenuous resistance must be expected and overcome. Successful system reform often takes place after traumatic events which undermine institutions, such as domestic upheavals, losing a large war, foreign occupation, massive economic crises etc. 11 The greatest difficulty is posed when slowly descending curves which amount to overall decline require system reform, but are too gradual to shock the system into turbulence which reduces rigidities and which, paradoxically, opens up opportunities for system reform. When organizational inertia is added to active resistance by endangered power structures, a main catch of system reform arises: for system reform in complex societies, organizations are an essential instrument. But, the inertia of existing organizations renders them a major barrier to system reform, while their substitution by other organizations is nearly impossible and, even if partly feasible, involves transition costs which endanger the system reform. The problem can be summed up by my conclusion from a study of the history of system-reform efforts, namely that unless main decision makers and power holders are changed, radical system reforms have little chance of success. But changing main decision makers and power holders is very difficult, because of their resistance and often also because of the scarcity of alternative qualified candidates. Recommendations. Four main interrelated strategies are available to cope with inertia and resistance to system reform. The first involves waiting for history to provide shocks which open up opportunities for system reform, or actively adopting a phased approach, with shock effects being introduced first to destabilize reality, reduce resistance and increase innovation propensities. The second strategy limits the reform to the minimum critical mass and proceeds in modules. The third involves mobilization of support from existing power structures. The fourth requires building up alternative power bases, organizations and elites. Successful system reform requires a mix of these four main strategies, all of which are demanding and risky. Waiting for catastrophe to prepare the ground for system reform is a strategy of last resort. If nothing can be done to reform a system before it fails, I recommend having designs for reform ready for implementation when the system is shocked. Historically, this has often been the case, with high costs and many failures. Prescriptively preventative reform is obviously greatly preferable. The second variation of this strategy is to engage in deliberate destabilization, in order to make radical reform feasible. This is a dangerous strategy and often an impossible one. Limited wars have sometimes been initiated to facilitate internal reforms, but this is unacceptable now. Instigation of controlled economic crisis to prepare the ground for structural reforms is also unacceptable both in terms of values and politically in modern societies. Still, in some cases controlled destabilization
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followed by system reform is preferable to irreversible decline and perhaps catastrophe if the system is not reformed. Limiting reform to a minimum critical mass is related to the earlier recommendation to advance with 'locomotives of change', which also uses economically limited reform resources. The recommendation is to adopt a measure of intervention, in modules, which moves the system in desired directions with a minimum of essential effort. In this way less resistance is produced (and less scarce system-reform resources are needed) than in larger-scale action. The problem of minimum necessary scale must still be faced. My own tentative study of system reforms leads to the conjecture that often the minimum critical mass is of quite large a scale. 12 When this is correct, the potentials of the strategy of reducing reforms to the essentials are limited and efforts to minimize resistance leading to reduction of reform efforts below the critical mass will ruin the reform as a whole. Thus, it may well be that in order to transform the USSR and PRC into high-tech societies far-reaching political reforms are essential--though not necessarily in the direction of Western democracy--in addition to economic and administrative transformations, even if this multiplies resistance. Gaining the support of existing organizations and power structures often involves compromising the essence of system reform and can easily become self-defying. Land reforms are often a case in point, buying the agreement of land owners being so expensive as to be impossible, and giving in to their demands making meaningful reform impossible. Still, purchasing agreement may often be the cheapest of all strategies. Thus, preserving the material privileges of main elites, even when their power is reduced, may be a recommended strategy for handling at least parts of the nomenclatura.
Another version of the third strategy is to build a new coalition of presently powerful actors and to convince it of the necessity for system reform. If stark realities make the need for system reform highly visible, if shared values and ideologies provide a strong basis for agreed sacrifices and efforts, and if the costs to main coalition partners can be limited and distributed in ways perceived as equitable, then achieving consensus on system reform by an adequate coalition of powers is feasible. The alternative and last strategy is to build up new power bases, such as by mobilizing mass support to overcome conservative elites. 13 This may work in democracies, where electoral processes are highly developed and provide a mechanism for translating mass support into political power adequate to enforce thorough-going reforms. But when no institutionalized channels for translating mass support into legitimized political power exits, appeal to the masses will often produce demands and movements which, in turn, will undermine the system reform by asking for more than can be delivered and then becoming apathetic or turning against the reformers. In addition unstructured mass action will produce turbulence which easily gets out of control and stimulates counter-reform. Different combinations of these strategies may meet needs. But, my own impression is that system reform requires changing at least some of the higher decision makers, executives and elites. Hence, the need for power which permits this, including ultimately support by the armed forces. When
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democratic mass support or national consensus coalitions cannot be relied upon, there is no escape from the recommendation of having a reserve of force available to deter resistance, to rotate elites and to implement other essential elements of system reform which generate much hostility and resistance. In addition to strategies for concentrating power essential for system reform, personnel to take over positions must be prepared. Therefore, intense cadre training is essential. On the higher level, some kind of 'National Policy College' where top policy makers and policy influencers study main reform issues and crystallize informed opinions on main strategies is recommended. System reform decision supports
The challenges of system reform, as partly indicated by the five problem areas looked at above, require outstanding staffs for rulers and their colleagues. Fully to elaborate necessary supports requires another memo. But four recommendations can serve to illustrate the nature of required system-reform decision supports, as a conclusion to this memo. First, outstanding strategic thinking capacities are essential, working constantly on deep analysis of main system-reform issues. Advanced versions of policy R&D organizations, so-called 'Think Tanks', are needed to do so. These should work at arm's length from the rulers, so as to avoid the heat of the corridors of power and to be able to engage in iconoclasm and innovation. Second, personal offices of the ruler must be equipped with units engaging in high-level staff work, to relate current decisions to basic system-reform strategies, including necessary crisis decision-making. Outstanding professional islands of excellence working with the ruler are the single most important component of adequate system-reform decision supports. But, because of problems of interface with the ruler on one hand and subjection to political, bureaucratic and other pressures on the other, advisory units to rulers are very difficult to design and maintain. 14 The need to counteract 'motivated irrationalities 'is which are widespread among system-reforming rulers and also of some use in maintaining necessary optimism, as already noted, illustrates the difficult tasks of such units. Third, monitoring and evaluation of system-reform effects by independent agencies, reporting only to the ruler and his units, are essential. Without reliable intelligence on the reform and related variables, learning is impossible. Only agencies not involved in reform decisions and implementation can provide relatively unbiased information and evaluation. Therefore, setting up independent and separate system-reform monitoring and evaluation agencies is recommended. Fourth, and last in this breviary, is the need for top-quality professionals in system-reform policy planning to staff advisory units for the ruler and related agencies, as a distinct part of the cadre training mentioned above. Intense preparation of such professionals, partly on a crash-course basis, is essential for successful system reform in the complex conditions of the modern world. The last recommendation returns us to the lack of disciplines and
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professionals focusing on system reform, as mentioned at the beginning of this memo. Building up relevant knowledge and educating a new breed of professionals emerge as a cardinal mission for improving human endeavours to try and influence the future for the better, of which system reform by rulers is an important, though fragile, form. Notes and references
1. See Sidney Hook, The Hero in History: A Study in Limitation and Possibifity (New York, Day, 1943). 2. Mikhail Gorbachev, Perestroika: New Thinking for Our Country and the World (London, Collins, 1987), as far as I could find out, is unique as a book written by a head of state, at the beginning of his rule, which diagnoses his country as being in decline. 3. The line of reasoning underlying this memo is fully worked out and applied to a concrete setting in: Yehezkel Dror, Memorandum for the Israefi Prime Minister, Vol I, Situation of the Nation; Vol II, State Building; Vol III, Raison de Zionism; Vol IV, Breakthrough Grand-Poficies (Jerusalem, Academon, 1989, in Hebrew). The approach as a whole will be presented in Yehezkel Dror, On Rufing: A Policy Mirror for Captains-of-State (in work). 4. NIRA, Japan Towards the 21st Century (Tokyo, National Institute for Research Advancement, 1979), reflects only very small parts of the work, most of which has not been published in Japan either. 5. Important to apply to policy making, with a number of necessary adjustments, is the distinction made by the French Annals school of history between various time dimensions. In that terminology, a main problem of system reform is the need to fit action located in human time to social time processes. For an introduction into salient Annals thinking see, for instance, Fernand Braudel, On History (Chicago, IL, University of Chicago Press, 1980). 6. Recommended is the approach mainly developed by Albert- Hirschman. A convenient updating summary is provided in Albert O. Hirschman, Rival Views of Market Society (New York, Viking, 1986), especially chapters 1-3. 7. On the concept of 'policy gambling', see Yehezkel Dror, Policymaking Under Adversity (New Brunswick, NJ, Transaction, 1986, paperback 1988), especially pages 167-176. Appropriate methods are discussed in Yehezkel Dror, 'Uncertainty: Coping with It and with Political Feasibility', in Hugh J. Miser and Edward S. Quade, eds, Handbook of Systems Analysis: Craft Issues and Procedural Choices (New York, North-Holland, 1988), pages 247281. 8. For this striking concept, see David Pears, Motivated Irrationality (Oxford, Clarendon Press, 1984). 9. See Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York, Harper, 1953), chapter 7. 10. For this formulation, see Milton and Rose Friedman, Tyranny of the Status Quo (New York, Harcourt Brace Jovanovich, 1984). 11. Relevant is the main argument in Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (New Haven, CT, Yale University Press, 1982). 12. See Paul R. Schulman, Large-Scale Policy Making (New York, Elsevier, 1980). 13. Very stimulating in this respect is Roberto Mangabeira Unger, Plasticity into Power: Comparative-Historical Studies on the Institutional Conditions of Economic and Military Success--Variations on Themes of Pofitics, a Work in Constructive Theory (Cambridge, Cambridge University Press, 1987), especially part 3. 14. Compare, for instance, William Plowden, ed, Advising the Rulers (Oxford, Basil Blackwell, 1987); and Tessa Blackstone and William PIowden, Inside the Think Tank: Advising the Cabinet 1971-1983 (London, William Heinemann, 1988). 15. Pears, op cit, reference 8.
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