Self Report Accuracy in Local Economic Development Programs

Published in the November, 2020 issue of Economic Development Quarterly

Abstract: Local economic development programs are primarily aimed at increasing employment and tax revenues. Data on these programs are collected through self-report surveys conducted by the International City Managers Association and others. This study evaluates predictors of accurate self-reporting. Using agency theory as a theoretical framework, the study measures the quantity of internal reporting components and the quality of financial reporting and evaluates how these are associated with accurate self-reporting. As a control, the condition of the local economy is also evaluated. The findings indicate a statistically significant relationship between the quality of financial reporting and the strength of a local economy with accurate self-reporting. Recommendations to improve research in this area are for the Government Finance Officers Association and the International City Managers Association to work together, with the former creating standards for reporting on local economic development programs and the latter aligning its survey with these standards.