AS the Group of Seven leading industrial democracies prepare for their annual gathering in London in mid-July, the question of whether the West should resuscitate a prostrate perestroika in the Soviet Union echoes like a rerun of last year's debate. But now the urgency is still greater. Perestroika was already stalled in quicksand last year at this time but few outside the Soviet Union realized the scale of the looming collapse. While he was already widely disdained at home, President Gorbachev still retained a golden glow on the world stage. Now even that illusion has been dispelled. Too far gone to conceal his desperation, Mr. Gorbachev and his lieutenants plead with almost humiliating candor for a bailout of the devastated Soviet economy. The numbers vary, but figures as high as $30 billion a year for the next three to five years have been mentioned. It is already clear that he will not get what he is asking, or anywhere near it. Legitimate competing demands from domestic constituencies in the West and the still greater devastation of half a dozen regions in the third world set severe constraints on what can be devoted to any single country, however fateful the consequences of its collapse. But the fact that so much else hinges on a safe and successful dismantling of this empire in meltdown argues forcefully for a more tangible response than our mere condolences or a set of nonnegotiable demands. Yet it is unwise to base Western policies on bolstering the survival of any individual, be he Gorbachev, Boris Yeltsin, or another. In the maelstrom of post-totalitarian Soviet politics, the frozen predictability of former years has been replaced by a molten lava of explosive uncertainty. A strategy of supporting Gorbachev would likely backfire in any case, since he no longer enjoys the support of the Soviet public. Recent polls show only 14 percent now back him. To avoid reinforcing the old structures of bureaucratic power at the expense of these fragile new movements, the bulk of whatever assistance is given should be targeted directly at local institutions and enterprises. Rather than distributing funds that can all too easily be diverted to purposes other than those intended, aid should emphasize highly specific training and education and the provision of tangible goods and services. More than money, the Soviet economy needs an infusion of Western experience and expertise in virtually every aspect of market economics and parliamentary democracy. The best means of assuring that this assistance reaches its intended recipients is to organize a plethora of exchange programs bringing Soviet managers, technicians, professionals, and academics to the West to work alongside their counterparts and gain essential hands-on experience. At the same time, Westerners should be brought into Soviet f actories, schools, businesses, and town councils to consult with those in the same professions. Utilizing home stays in each country, inexpensive bus, train, and charter air travel, these citizen exchange programs need not cost a fortune but could be extraordinarily effective, as many have already proven to be. Carried by one warm hand to another, they are far less vulnerable to corruption. To varying degrees, the crisis of transformation that has gripped Soviet society and economics is the same as that facing the rest of Eastern and Central Europe. Indeed, their fates are inextricably entwined. The Poles, Czechoslovaks, and Hungarians well realize this truth as they peer anxiously eastward and contemplate the chaos. Any plan to invest in Soviet reform should incorporate at a minimum these three Central European nations. Many of the greatest obstacles are shared by the entire region: primitive telecommunications and inadequate distribution systems; outmoded production technologies; a lack of managerial and technical expertise in market economics; and inexperience with democratic processes. As these problems are shared, so are the solutions. Decentralization should be the touchstone of Western engagement, and citizen exchanges could be at least as effective in Central Europe as in the Soviet Union. But in some cases economies of scale can be realized by handling problems regionally. So it may be with telecommunications and distribution networks, vital components of a modern economy.ERHAPS because of their proximity or an awareness of their tragic shared history, Western Europeans seem better able to understand the Western stake in the East. It is fine, indeed essential, that the West make aid conditional on more open social and economic policies in the former Eastern bloc. But some US post-cold-warriors take the "let-them-eat-cake" view - that the more desperate the Russians are, the better off we are. This is an irresponsible, shortsighted, and ultimately self-defeating strategy. We will all inherit the turmoil and tyranny that would almost inevitably follow the collapse of the reform impulse in the East. A comprehensive strategy of engagement, financed largely by reductions in the many extravagant weapons systems on both sides rendered obsolete by the cold war's end, could provide the catalytic assistance necessary to sustain these still-precarious experiments in freedom. It need not initially be an immense sum. Beginning modestly, it should build over time as confidence grows. But it must be consistent support maintained over a period of years, signaling to all our commitment to a partnership in the transition process. The West won the cold war. Will we now find the wisdom to ensure the peace?