Public Policy Gains a Foothold at B-School

With government's role in business and the economy expanding, MBAs are rushing to study everything from environmental policy to the lessons of the Depression

By Francesca Di Meglio

Public policy, usually the purview of Washington-based policy wonks and PhDs in the social sciences, is not something that typically attracts the attention of MBAs. With high-paying Wall Street and consulting jobs beckoning, few bother to explore the intersection of the public and private sectors, opting instead for courses in finance, management, and strategy. But the global economic crisis, along with calls for tougher regulation of the finance industry, is starting to change that. Suddenly, an area of study that's gathered dust for as many as 40 years at some MBA programs is hot.

The booming interest in public policy coincides with the arrival of a new generation of MBA students intent on making the world a better place. But for the most part, MBAs are rushing to enroll in a host of new public policy courses now available at top B-schools in the hope that knowledge of Washington's inscrutable ways will help make them more successful in business.

"Throughout history, the role of government in determining whether an economy will be successful can hardly be overstated," says Kermit Schoenholtz, an adjunct professor at New York University's Stern School of Business (Stern Full-Time MBA Profile). "Understanding government and policy will help you be a better businessperson."

With the government's role in business and the economy expanding, some top business schools are reporting increased interest in public policy courses in the past year. For example, at Carnegie Mellon's Tepper School of Business (Tepper Full-Time MBA Profile), enrollment in the Business, Government, and Strategy course doubled to 85 students since 2009, says Lester Lave, a professor of economics at Tepper who teaches the course. "It's hard to think of running any business in the U.S. without understanding what the federal government is doing," he says.

How Government Works

The new public policy courses on offer cover all aspects of government and its regulation of businesses, its role in the greater economy, and its own fiscal matters. Also included are such issues as nonprofits, sustainability, urban development, energy, and environmental issues, including climate change. What all of these courses have in common is that they impart a basic understanding of legislation and politics—essentially, how government works—to give students the tools they need to come up with tenable goals for their businesses.

Teaching public policy in general is not new to business schools. The University of California at Berkeley's Haas School of Business (Haas Full-Time MBA Profile) has an entire program for MBAs called Business and Public Policy, which dates back to the 1960s, says Rui de Figueiredo, who chairs the program. Since the 1970s, the Stern School has required its students to take a public policy course about firms and the regulatory environment in which they operate because so many students go into finance, says Ingo Walter, vice-dean of faculty and professor of finance at Stern.

What is new is the content of the courses, many of which have gone from being about exploiting loopholes to incorporating regulation into your strategy, or from doing business in domestic locations to the regulatory challenges involved in doing business overseas.

As those kinds of lessons become more of a necessity, business schools are hoping to integrate these issues into well-established curricula. Until then, here are some intriguing standalone classes for any aspiring MBAs looking to better understand the world of public policy.

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