Despite a growing movement toward accountability in the public sector, little research exists on factors affecting the use of accountability tools such as performance measurement. Many publications suggest how to use performance measures, but little is known about why some municipalities use performance measurement whereas others do not. This study examines performance measurement within economic development, an area of local government that attempts to create better jobs and wages for citizens, yet faces growing criticism over its cost and effectiveness. The analysis identifies factors that affect performance measurement in economic development and compares the impact of structural determinants such as demographic and socioeconomic factors to local community choices such as organizational, political, and community forces. Of the local choice variables, performance measurement was most influenced by organizational characteristics of the economic development agency: staff size, budget, plans, partnering, and number of business incentives offered. Structural determinants, which included city expenditures, labor and employer barriers, competition for investment, and region of US, exerted less influence on performance measurement, yet showed that socioeconomic and competitive forces do affect the use of accountability tools. Overall, the findings indicate that in municipal policymaking, both structural constraints and local choices matter, but local choices matter more.
