provement of the effectiveness of State and local programs and some of the problems which may tend to retard that effort.

Plainly, a management system which stimulates better analysis and then applies the results of that analysis to governmental decisionmaking can be useful at any level of government at which resource allocation decisions are made-in State government, city government, county governments. All of these levels of government deal with problems comparable to those of the nondefense Federal agencies: Health, education, poverty, justice, housing, employment, natural resources. The usefulness of such a system at the State and local level should have at least two aspects:

First, it should make possible a better and more effective utilization of State and local resources in the same way we expect it will stimulate better utilization of Federal resources; by improving our understanding of the problems to be solved, and our ability to estimate the probable costs and effectiveness of the various measures which can be taken to solve them. In addition, however, State and local systems comparable to PPBS will have the important ability to help us better relate local efforts to Federal efforts; in all of the areas that I just mentioned, Federal, State, and local efforts are involved. It is important that we learn more than we now know at each level of government about the plans and programs of the other levels. Ideally, indeed, for each State and local function which parallels that of a Federal agency, all the State and Federal agencies would eventually work out comparable planning, programing and data systems. I would emphasize that while systems should be comparable, they need not be identical. All that is necessary is that each level of government understand what the other level intends to do.

Some efforts along this line have in a very preliminary and tentative way already begun. The Bureau of the Budget, for example, is taking a lead in organizing a cooperative pilot project to develop programing systems for several program areas which involve substantial Federal financing. For these programs, multiyear PFP's will probably be developed by five States, five counties, and five cities in a joint effort.

Additionally, several States-New York and Michigan among them have expressed interest in the operation of the Federal program and financial plans. The city of Portland, Maine, is also interested in exploring the possibility of devising such a system for its own use. And the city of Detroit and the Department of Housing and Urban Development are now attempting to work out jointly a system for the planning and programing housing efforts for that city. It is still far too early to report any accomplishments, however, and there are many problems to be solved before we can expect the maximum benefit from governmental management systems based on intensive analytic work. One problem you alluded to, Mr. Chairman, and that is the problem of finding people.

One of the problems associated with the wider use of systems like PPBS at other levels of government is clearly the need for a wider understanding of the value of serious analytic work and of its nature there are still probably too many citizens and local officials who are uninformed as to systems analysis or whose hopes or fears

for it foresee machines operating inexorably in some automated decisionmaking process.

But there are two much larger problems: The first is that of using better than we do now the analytic talent we currently have. The second is that of developing additional analytic capability and of deploying it more intensively on problems of public policy. The subcommittee will understand, I hope, that my purpose here is not to propose specific plans of action but only to stimulate thought.

Under the heading of better utilization of existing analytic capability, a number of things might be said. First, much of present systems analytic ability is associated with the so-called hardware industries and especially those involved in defense and space activities. The four Aerospace Industries studies which were done for the State of California demonstrate, however, that the analytic techniques developed in those industries are relevant to problems of State and local governments, and those studies demonstrate also that a number of such firms may be interested in working on broader social problems and have something to contribute to their solution. The current work now being done by computer manufacturers on analysis of the learning process and the design of machines to accelerate learning is another case in point. The analytic capabilities already well developed in private industry should be encouraged and utilized by government at all levels wherever they appropriately can.

Secondly, there are a number of existing nonprofit organizations for research and analysis. These, too, have tended to focus on problems of defense but these, too, might be interested in problems of State and local governments. Indeed, they are being drawn into consideration of Federal nondefense problems through the increased research and analytic requirements of Federal agencies. Here again, existing pools of talent can be used to produce analyses of nondefense activities.

Thirdly, State and local governments, like the Federal Government, may find the universities, and especially the schools of business and departments of economics to be good sources of analysis and of analysts.

Over the longer run, however, it is my belief that additional analytical capability will have to be developed and that new organizational forms might well be appropriate to insure that those capabilities are effectively used.

One way of producing additional capability is obviously to have training and familiarization courses, of various lengths and intensity, for governmental employees. The Federal Government has found this useful in connection with the establishment of PPBS. State and local governments may wish to use similar programs. In addition, State and local governments, like Federal agencies, may well want to recruit trained analysts directly for work on analytic staffs at all levels. Such a recruiting effort would soon run into the fact that the number of trained and capable analysts is extremely limited. It may be, therefore, that over the longer run we are going to have to look to the universities to produce a greater number of such people. I really should not have expressed that so weakly. It is clear we shall have to look to the universities to do this.

Finally it is probable that there will develop specialized centers at which our major domestic problems-transportation, housing, crime, health-will be continuously under study. I noted earlier that the analysis of some civil problems was easier than the analysis of some problems of defense. Defense studies now have one great advantage however. Good analysis of hard problems takes time-the persistent application of intellectual effort to a limited range of related issues over a period of years. These conditions are met in a number of defense-oriented organizations-RAND, RAC, IDA, CNA, among them, and the contribution of these organizations to our understanding of the problems of defense has been very great indeed. But very few similar institutions exist which are devoted to nondefense issues. We come closest in the area of medicine and health. But what is needed are centers for the study and analysis of all major social problems. These would serve many purposes. They could bring together and focus the work of analysts now working separately. They could stimulate interest in social problems in analysts not now working on them. And finally they could provide a training ground for analysts who might later work directly in the Government.

You will recognize, I think, that these ideas are preliminary and tentative. Much needs to be done before we will know how we can most effectively aid State and local efforts to better utilize the analytic skills which are proving helpful at the Federal level. But I believe that these hearings can be helpful in that effort, and I am pleased to have been able to take part in them.

Senator NELSON. Thank you. Would there be a value in Congress, itself, or any legislative body having an independent systems analysis capability.

Mr. RowEN. That is a very large question indeed.

Senator NELSON. Let me put it this way. Can the executive branch, at least in terms of all of the agency functions, effectively perform that function and furnish the Congress the information or does Congress need some independent systems analysis agency of its own?

Mr. ROWEN. I really am uncertain on this. I think the executive branch can do an awful lot better job of supplying the Congress with data and analyses than it has done in the past. I am quite clear on that.

Now, given the improved effort, the improved performance on the part of the executive branch which we are trying to undertake, how much more the Congress would want to have by way of analysis which could not be, for whatever reason, provided by the executive branch, I don't know. In a way we are trying out that experiment in introducing this system and with the expectation that the Congress will receive much better data and analyses than it has in the past.

Senator NELSON. Or if not an independent systems analysis agency of its own, qualified analysts on each committee who are able to evaluate with some independence the work of the executive agency.

Mr. RowEN. Yes. I think one problem here would be a critical mass problem. It is very hard for an individual or a very small group of people operating more or less by themselves to really have the sufficient skills, to have the breadth of experience, the breadth of technical skills available to them which really is important. This, of

71-392 0-67- --12

course, has been a problem in congressional staffs, the question of size, and getting built into these staffs the appropriate skills. It would be a hard thing, I suspect, to have each committee supplied with the relevant expertise in systems analytic terms, especially in the short run, because of the shortage problem that we have discussed.

Senator NELSON. I would assume that all analyses done by the executive agencies with the various alternatives would be submitted to the Congress in any event. In other words, after analysis and a projection of the budget by any department or agency, the executive branch is going to make some recommendation between competing claims. I assume that the Appropriations Committee and the appropriate committees of the Congress would have received all the benefit of all the background and the reasons for the decisions made in their recom-. mendations by the executive branch.

Mr. ROWEN. We intend that the Congress receive the substance of the analyses that have been done. The specific documents, however, that I have referred to are budgetary documents, the program and financial plans. On the other hand, we hope and expect that agencies will draw on these and make the materials available to the Congress. In fact, a good deal of value of the system will be lost if this is not done.

Senator NELSON. One of the main objectives of the bill is to provide appropriations to industries and to State governments for the purposes of systems analyses. The State government may make contracts with private industry under this bill for analysis. What value do you see in the Congress, the Federal Government, and the State governments for using the Rand Corp. type of agency to evaluate social problems?

Mr. RowEN. I think the value, over time, is going to be enormous. I have no doubt about this. I think the immediate problem for State and local governments as of right now is building up some internal competency in this area. It is very difficult, I think, right now for most State, city, and county governments to do this. If they had money, for example, to do this right now they would find it very difficult in most areas to know how to frame the issues and how to use the results. I think that Dr. Enthoven could speak to this in connection with the Defense Department. I have no doubt at all that the effectiveness of outside organizations such as the Rand Corp. or the aerospace companies has been very much increased, enormously increased, by the existence inside the Defense Department of a competent group of people who can take the results and assess them and do some independent analyses of their own. This is what worries me right now about the state of affairs in most State or local governments. There is no place to plug in the results in many cases.

If I may just add, we are working on this very actively in this pilot program we are doing, carrying out with five States, five cities, five

counties.

Senator NELSON. Have you selected those yet?

Mr. RowEN. Yes. We are working with the Council of State and Local Governments, League of Cities and comparable county organizations. Those cities, States, and counties which have expressed interest and decided they want to join in this cooperative venture have all been selected. We are now into the process and I hope within

the next few weeks a contract will be signed which will permit the work to get started. Now this is potentially a very important move. This will be the first time a systematic, sizable effort has been made to get State, city, county governments into the program budget and systems analysis business, certainly on the part of the Federal Gov

ernment.

Senator NELSON. I think this is a very fruitful and creative idea. As you are aware, this is one of the problems. Problems do cross county lines, village and town lines and so forth. For example, the metropolitan area of New York has the incredible situation of some 1,400 various units of government. I think the State is no doubt the best regional government in America. It is a regional government in a sense.

My question is: Have you made a contract with any regional planning commissions for this particular program which encompass a number of counties?

Mr. RowEN. I am not aware that any such contract has been let. The 701 money that you mentioned earlier is of course relevant in this connection. It is my understanding that this money on the whole has been used much more for traditional land use planning, to some extent transportation planning, and not the full-blown systems analysis approach that we have been discusing today.

Although I do not mean to depreciate the value of this other work, I think it has been moving in the right direction, it just has not gone far enough.

Senator NELSON. The reason I raise that is that there are very few regional planning commissions in the United States and as of 1959 when I was in State government there was almost none or only a few that weren't doing much.

Since then some regional planning commissions have been developed which do cover a number of counties and which with 701 grants are doing a comprehensive analysis of the whole spectrum of problems that confronts them, including transportation, education, recreation, welfare, sewage disposal, and so forth.

I would think that it would be valuable. I think the best one there is in the State of Wisconsin, the Southeast Regional Planning Commission. They have received national recognition now because they are taking on a large metropolitan area which would include Ozaukee County, Milwaukee County, all of Waukesha County, Kenosha County, Racine County, all the way down the Illinois line. It must involve a million and a half people I should guess.

Regional planning commissions are going to become of increasing importance simply because you can't settle your institutional transportation and municipal sewage problems within the particular unit of any particular municipality or county.

I would hope that you would consider using at least one regional planning commission in this program. This kind of concept of regional planning commissions and regional approach to the problems is going to become of increasing importance.

As a matter of fact, I don't see how any metropolitan area can solve its problems without using the concept of the regional planning commission and regional programs.