A New Scenario Analysis Technique…and Palestine

I have frequently advocated scenario analysis on this blog and elsewhere (e.g., ISA 2007) as a useful technique for minimizing bias when thinking about the future. (Here I am concerned with the future of global affairs, though the technique would work equally well for personal life or any other problem where one wants to understand how a complex and uncertain future is likely to unfold.)

In scenario analysis, one typically constructs a “landscape,” if you will accept that term, that constitutes all future possibilities. This landscape is formed by a set of axes, typically two. (More than two increases accuracy but at the cost of exponentially rising analytical and graphical difficulty.) For example, I used the landscape at the right in my previous analysis of the future of Palestine. The problem is that graphing in this way implies that one must select one of the four scenarios. What then does one do in the quite possible situation of events being in equilibrium, with no tendency to move toward any of the scenarios? This graphical technique leaves one with no place to position events that are “neutral” in the sense of not favoring any of the four scenarios depicted. Thus, a method employed to eliminate the bias of falling in love with the hypothesis you favor has at the same time introduced a new bias – that the only possibilities are going toward one of the scenarios.

A small enhancement to the standard methodology would be to distinguish the area at the center (labeled “Equilibrium”) to imply that in fact there are not four but five scenarios. The Equilibrium Scenario says that a balance exists. Although any individual event may be placed anywhere on the landscape (i.e., may be interpreted as indicating movement in the direction of any scenario), one must keep in mind the possibility that events may occur primarily in the center. For a foreign policy analyst, this has considerable significance – suggesting that things are moving along quite moderately. Thus, the blue circle can, somewhat simplistically, be viewed as the “no crisis” zone: as long as behavior in the political system occurs in the equilibrium zone, life seems to be happening normally, with no fundamental changes on the horizon.

In contrast, what if all the events occur outside the region of equilibrium, as in the graph below showing key events in the evolution of Palestinian since the historic January 2006 Hamas electoral victory? There is of course no boundary to the region of equilibrium, but to the degree that you judge this graphic to be accurate, the message is clear.

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