Iowa and New Hampshire are worried. They want to preserve their first-in-the-nation standing in the presidential nominating process, but other states are threatening to crowd in on them. So the governors of the two leadoff states have set up a commission to protect the preeminence of the Iowa caucuses and the New Hampshire primary. ''We want to protect a system,'' Iowa's Republican Gov. Terry Branstad said, ''that has worked well for the American people.'' Has it?

Iowa and New Hampshire are small, quirky, out-of-the-way states, demographically unrepresentative of the rest of the country. No more than a handful of delegates are at stake. Why should the rest of the country care what happens in Iowa and New Hampshire? Because the contests there are usually wide open. Because the two states know how to run these things. Because the candidates and the press agree to treat them as proving grounds. And because Iowa and New Hampshire put a premium on organization and message--not money.

''It's a good process that gives a long-shot candidate-- one who doesn't have the support of the Establishment or who doesn't have a lot of money--the opportunity to test their ideas,'' Branstad said at the press conference last month announcing the commission. Democratic Gov. Jeanne Shaheen of New Hampshire added: ''Candidates have to go into people's homes. They have to talk to voters one on one. They get questioned about why they are running for President and what they want to do. That's really the advantage that a small state like New Hampshire can bring to this process.''

Case in point: in 1976, after Watergate, Jimmy Carter rose out of obscurity to win Iowa and New Hampshire with his outsider message of moral redemption. On the other hand, Steve Forbes spent a fortune last year trying to buy Iowa and New Hampshire. He got a fourth-place finish in both states for his effort.

Establishment candidates often get their comeuppance in Iowa and New Hampshire. President Truman got defeated by Estes Kefauver in the 1952 New Hampshire Democratic primary. President Johnson was embarrassed by Eugene J. McCarthy's strong New Hampshire showing in 1968. Both Presidents got the message and pulled out of the race. In 1984, when Walter F. Mondale was all but anointed by the Washington Establishment, New Hampshire Democrats said, ''Just a minute, there,'' and voted for Gary Hart. Patrick J. Buchanan embarrassed two GOP front-runners in New Hampshire--George Bush in 1992 and Robert Dole in 1996.

Candidates ignore Iowa and New Hampshire at their peril. Scoop Jackson ignored New Hampshire when he ran for the Democratic nomination in 1976; he won Massachusetts a week later, but it didn't matter. Ronald Reagan ignored Iowa in 1980 and got beaten there by George Bush. Al Gore ignored both states in 1988, to pursue a southern strategy; Gore's whole campaign went south.

Of course, adjustments have to be made when local candidates run. Iowa meant nothing in 1992 because no Democrat would run there against favorite son Tom Harkin. Massachusetts candidates are always expected to do well in next-door New Hampshire.

The biggest threat to the preeminence of the New Hampshire primary in 2000 comes, not from other states, but from New Hampshire's U.S. Sen. Robert C. Smith. Smith says he may run for the GOP presidential nomination, but other New Hampshire Republicans are pressuring him not to enter the race. A New Hampshire reporter asked Smith whether he would step down if he came to the conclusion that his candidacy would hurt the primary. ''If I thought it would hurt the status of the primary,'' Smith replied, ''I might.'' Imagine someone declining to run because it would diminish the importance of his state's primary!

The Iowa and New Hampshire contests work because they do what they're supposed to do: They separate the starters from the nonstarters. They clarify the race. And they do it in different ways. The Iowa caucuses are meetings, which put a premium on organization and commitment. The New Hampshire primary is a secret-ballot election, which puts a premium on broad appeal.

There is a serious problem with the nominating process, but it isn't with Iowa and New Hampshire. It's with the several other states that have been moving their contests earlier and earlier. As a result, after Iowa and New Hampshire winnow the field, the contest shuts down much too quickly. It's all over just a week or two later.

The nominating contest is supposed to start in Iowa and New Hampshire. It's not supposed to end there. But as the primaries get more and more front-loaded, that's exactly what's happening. It's perverse. The campaigns in Iowa and New Hampshire are getting longer and longer. Most candidates for 2000 have already visited Iowa and New Hampshire many times.

On the other hand, the primary campaigns after Iowa and New Hampshire are getting shorter and shorter. Last year, Dole effectively wrapped up the nomination within two weeks of losing the New Hampshire primary. Once Iowa and New Hampshire narrow the field, instead of a careful, deliberative process of examining the two or three finalists--bang! It's over. Front-loading the primaries is making Iowa and New Hampshire count more. And all the other states less.

William Schneider is a resident fellow at the American Enterprise Institute.