One could argue that from an academic point of view PFM makes a very inter-disciplinary field, combining budget management, economics, government accounting, treasury management, public policy, fiscal reporting, internal and external audit, debt management, IT, administrative law, political science, public administration, and even change management. Enough topics to keep students very busy. There certainly are other professionally-oriented graduate degrees based on inter-disciplinary collections of subjects. Consider the examples of Master’s of Business Administration, Master’s of Public Policy, Master’s of Public Health or even Master’s of Foreign Service—they all provide important synergies from combining subjects one could also study separately. By analogy, one would expect PFM to fit right into this category.
The reality is, however, that it doesn't. A basic search for graduate education in the US reveals that programs dedicated to PFM don’t really exist as such. Ones dedicated to the related, but much broader field of public finance are available, but even these are few and far between. In the U.S., for instance, the popular comprehensive guide to graduate degrees provided by the U.S. News and World Report’s Education Section lists Public Finance as a specialty sub-division of Economics featuring only 13 schools. At those schools, public finance appears as either a small topic area that is part of another degree (e.g. Public Policy, Public Administration, Finance, etc.), or at most as a non-degree certificate or specialization (as in the case of University of Pennsylvania’s Institute of Government, or University of Maryland’s School of Public Policy). Other countries seem to do a little better, with Google showing some Public Finance degrees available in France, or through a joint European Master in Public Economics and Public Finance, or in China. A cursory look at all of those curriculums reveals no particular emphasis on PFM processes or systems.
World-renowned (in PFM circles) PFM expert Prof. Allen Schick (University of Maryland’s School of Public Policy) points out that business finance is a much more attractive field due to its higher expected earnings for prospective students, as well as the option (at least at most major U.S. universities) to enroll with relatively few prerequisites. Business finance also happens to be less technical/quantitative than the base needed for a solid well-rounded PFM expert. Thus, he explains, the lack of interest in thorough PFM degree schedules has traditionally provoked the lack of respective curriculums. In addition, Prof. Schick underlines the need for more interesting and accessible textbooks on PFM, or on public finance with linkages to PFM. PFM does a poor job selling itself. The existing textbooks, in his opinion, are highly theoretical, and don’t provide much insight in realities of the budget process, or the relevance of PFM to societal change.
IMF PFM colleagues further suggest two other factors that might help explain the apparent lack of PFM curriculums. One is that there really isn’t such a thing as “PFM expertise”. Instead, each sub-field could and does often very well exist as a stand-alone area. Furthermore, finance ministries and budget authorities tend to offer entry-level positions that require a narrow specialization in only one aspect of PFM—say, accounting or treasury management, or applied public policy. Thus, PFM professionals often don’t really need broad PFM knowledge until the mid-career point or even later, when they have advanced significantly. The argument, then, is that university students are not able to predict that need early enough. Prof. Schick half-jokingly speculates that most World Bank and IMF PFM experts themselves did not expect to reach their current posts early in their careers.
While understandable perhaps, the lack of PFM studies does seem unfortunate. The present world economic crisis points to a continued need for high-quality management of public finances.
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[1] Dimitar Vlahov is a research assistant for the Public Financial Management Divisions I and II in the Fiscal Affairs Department of the IMF, and is currently investigating options for his graduate studies.
