IF THE DEMOCRATS gathering next week to write delegate selection rules for the 1988 convention are willing to take a page from the Republicans' book, they can make a major contribution to their party and its next presidential candidate. What the Fairness Commission has to do is quite simple: deregulate the delegate selection process, get the national party out of the rule- making business and give it back to the states, where it belongs.

These rule-making commissions have become the battleground for the opening skirmish of presidential campaigns, with each of the candidates trying to design rules to his or her advantage. As a result, the rule-making process in the Democratic Party is less and less about producing a strong party and more and more about making candidates' strategies.

There is another incentive for deregulating the process. The last four Democratic conventions have been attended by delegates selected under rules mandated by the national party. Three of the four nominees of those conventions were soundly defeated in the general election.

The evidence already is accumulating that some presidential contenders are trying to figure out how they can structure the process to their advantage. The good news in this go-round is that no one appears to have yet figured out what rules would be most advantageous.

Ideally, a good nominating system has one overriding function -- to produce the strongest candidate to run in the general election. The system can accomplish this goal only if a wide variety of information is available about how the contending candidates for the nomination perform in different places under differing strategic requirements.

The candidate who is strongest three years before the election, when the rules are drawn, may be able to write them to his advantage. In so doing, he may win a pyrrhic victory -- taking the nomination but then losing the election that could have been won by another who might emerge in a different kind of process.

The Democratic Party first got into the business of wholesale rules changes after the debacle of the 1968 Democratic convention, when there was a widespread perception that the nomination process had been dominated by party bosses out of touch with what the electorate wanted.

The first rules commission, after the 1968 convention, was chaired by then Sen. George McGovern (S.D.) and later by former Rep. Donald Fraser (Minn.). Firmly committed to the broadest possible participation by rank and file Democrats in the nominating process, the commission required that all states open their delegate selection process to any people calling themselves Democrats.

This change significantly weakened the control of party regulars over the delegate selection process and had the unintended consequence of causing some states to adopt presidential primaries to avoid the complexity of the new rules and to meet the standards of widespread participation.

An indirect, but not entirely accidental byproduct of the McGovern-Fraser commission was that McGovern and his supporters, understanding better than anyone else the import of the rules changes the commission had adopted, were able to take advantage of those changes and propel McGovern to the nomination in 1972.

Obviously, these changes, prompted by the national Democratic Party and enacted into state statutes by Democratic legislatures, had the effect of increasing the number of presidential primaries and open caucuses in the Republican Party as well. By 1976 the amount of presidential primaries had doubled from the number held in the pre-reform days. For better or for worse, the McGovern-Fraser Commission had changed the nomination process from a semi-public process dominated by party regulars to a public process dominated by the electorates in primary and caucus states.

However some may mourn the passing of the good old days, large numbers of Americans now participate in the nominating process through either presidential primaries or the open caucuses that have become "the functional equivalent of a primary," as former Sen. Howard Baker (R-Tenn.) described them. It is as unrealistic to expect us to return to the days in which the organized party controlled who the delegates would be as it is to expect us to return to the days of "King Caucus" early in the 1800s when the congressional caucus of each party nominated the presidential candidates.

Since the McGovern-Fraser Commission finished its work in 1970, successive Democratic commissions have adopted more and more rules and spawned more and more regulations so that single aspect of the delegate selection process in the Democratic Party is now highly regulated. The party needs to take a hard look at whether or not regulation to this extent serves its broader purposes.

For example, in 1973, the second rules commission -- named for then-Baltimore City Councilwoman Barbara Mikulski -- eliminated statewide winner-take-all primaries in favor of proportional representation as a means of awarding delegates to presidential candidates. Under proportional representation, delegates go to the convention in proportions based on the share of votes received by their presidential candidate in a state's primary or caucus. Thus, a presidential candidate who comes in second or third can still have delegates on the convention floor.

The party has been arguing the relative merits of proportional representation for years. The point that needs to be made is not in favor of proportional representation or in favor of winner-take-all. The point is that both are legitimate ways of reflecting public preferences in a democracy but both have their disadvantages.

Proportional representation allows lesser known candidates with smaller followings some voice at the party's convention; but the system also encourages losing candidates to stay in the race and delay the intra-party reconciliation necessary for a strong general election effort. Winner-take-all systems are more in tune with most other American elections and they encourage candidates to build coalitions; but they cannot guarantee representation of every faction in the party at its nominating convention.

Why not have both? The Fairness Commission should deregulate this very controversial area of delegate selection and let each state decide how it wants to award delegates to presidential candidates. Doing so would guarantee a mix of systems -- from pure proportional systems where even very low vote-getters could win a delegate to winner-take-all by district or state.

A related area of regulation by the party are the rules that have been written to shorten the process and diminish the impact of the New Hampshire primary and the Iowa caucuses on the rest of the nominating system. For 1980, the Winograd Commission adopted the "window rule," which requires states to hold their caucuses or primaries no earlier than the second Tuesday in March of the primary year. Some states, most notably Iowa and New Hampshire, received exemptions in 1980 and further specific exemptions in the 1984 version of this rule.

Three things are important about this rule. One, it is fundamentally unenforceable. New Hampshire, traditionally the first state to hold a primary, has thumbed its nose at the rule and gotten away with it. Two, as a result of New Hampshire's scheduling its primary early (and the Iowa caucus), the rule has failed to shorten the time that candidates spent campaigning or to reduce the amount of money they spend. Finally, the rule also failed to lessen the importance of the first two contests.

New Hampshire has been the first state to hold a primary since 1952. No one was much outraged by this situation until recently. When states were allowed to be important in other ways than by being first, the timing of the New Hampshire primary caused hardly a ripple of complaint. California sat happily at the end of the nomination process for many years, justifiably confident that with its large number of delegates and its winner-take-all system, no candidate would ignore it.

It makes no practical sense for the Democratic Party to try to regulate the date of each state's contest, other than requiring what is already in the party charter -- that they be held in the year of the convention. Regulation has led to the unintended consequence called "front-loading" where many states move up to the second Tuesday in March to be sure that no candidate will fail to campaign there. The result has been to magnify, not diminish, the importance of the first contests by having them followed by many contests clumped together in what we've come to call "Super Tuesday."

A final example of a rule that should be left to the states is the requirement that voters in the delegate selection process publicly declare that they are Democrats and that they be willing to have that preference publicly recorded. The rule was originally designed to prevent Republicans from voting in Democratic primaries. But it fails to prevent Republicans from voting in most of the caucus and primary states that have do not have laws restricting primary voting to registered party members.

In Wisconsin, and to a lesser extent Michigan, voters traditionally have resisted openly declaring their political affiliation. As a result of its own rules, therefore, the Democratic Party is denied an important test for candidates in these two key states -- previously they could see how potential nominees do in a contest where anyone can and does vote. In an electorate where the balance of power is increasingly in the hands of voters with no party identification, regulating these people out of the nominating system is self-defeating.

As these examples show, many of the rules and regulations of the Democratic Party no longer serve or accomplish any important party goals. They are, for the most part, the result of a succession of compromises between interest groups, presidential candidates and political consultants who control a process based in Washington, D.C.

In 1978 President Carter's operatives on the Winograd Commission set the agenda and won changes designed to help in the president's renomination. Four years later, an alliance of Walter F. Mondale, Sen. Edward M. Kennedy and AFL-CIO members (the author included) designed a set of rules to favor the front-running candidates. Never mind that many of these changes did work as planned. The fact is that when rule-making is centralized and rules are uniform for all states, any presidential candidate or interest group with the capacity will find the temptation irresistible to design rules favorable to their interests.

Perhaps the most serious unintended consequence of this perpetual preoccupation with rule-making is that as rules become more intrusive, the individual political culture of each state is lost in the necessity of complying with the edicts of some commission operating out of Washington.

Despite the increased nationalization of American politics, there still exists, in 1985, an amazing diversity of political cultures in and among the states in the union. Setting aside homosexuals as an affirmative action target group may make good political sense in California, but it probably makes for political suicide in Alabama. Yet in the past four presidential elections Democrats have had one set of rules for everyone.

In trampling over the political traditions, cultures and structures of each state, Democrats may have lost the ability accurately to reflect grass roots sentiments in the nominating process. The irony is that this is exactly what they had hoped to achieve in the original McGovern-Fraser reforms.

Deregulation would allow each state to test presidential candidates its own way. In Wisconsin, deregulation would most likely mean a return to the open primary where non-party members are permitted to vote. And deregulation would restore to California -- the largest state in the union -- the option of playing the important and decisive role in the nominating process that it once had without feeling pressure to advance its primary to February or March. And, if California were again allowed to adopt a winner- take-all rule, deregulation would also provide an opportunity for a candidate with late momentum to catch up to the early winner in terms of delegates.

Some will criticize deregulation by saying that it will create 50 different systems and that that will be confusing. The response should be -- confusing to whom? The important thing is that voters in each state understand their own system so that they can cast their vote intelligently. That is much more likely when the system is designed in the state than when it results from a compromise in Washington.

Presidential candidates used to have to run in 50 diverse systems and no one seemed to regard this as a problem. Certainly delegate selection is no more and probably a good deal less difficult to master than international economics or arms control or any of the other subjects potential presidents need to know about. Also, the media have always been able to explain variations in local politics. For most of American history, each state had its own unique method of selecting national convention delegates and everyone who wanted to know seemed to be able to figure out just fine how the candidates were doing.

More important than simplicity is independence and the resulting diversity. Labor and other interest groups that have been criticized for their control of the Democratic Party will have an impact in those states where they already are powerful political players and will not be able to affect states where they do not or cannot deliver votes. Presidential candidates, no matter how strong, will find it difficult to fix the system to their advantage because decision-making will be so decentralized and, as most politicians know, all politics is ultimately local.

Two important legacies of the original reform commission should be kept. First, have written rules that are widely distributed so that every interested person has adequate notice on exactly how to participate in the process. Second, design strict standards for affirmative action to prevent discrimination on any grounds while allowing states to tailor the program to their own minorities. These two principles can be said on two pages of paper and are universally accepted by all Democrats.

The Democrats have tried it both ways; they have designed systems to nominate outsiders, they have designed systems to nominate insiders, and they have lost three of the four recent presidential elections. The problem is in designing systems in the first place. Let's get out of the business of regulation.