Measuring the Circular Economy in Cities: The Construction of Impact Assessment Indicators

Purpose: This study examines how circular economy performance indicators are constructed in an urban context, which is characterized by a multitude of conflicting interests and visions of urban development. It seeks to explore the process of constructing shared consensus about the performance indicators in situations of low contractibility (Speklé and Verbeeten, 2014), where intervention objectives and outcomes are not easily quantifiable as the object is ambiguous and cannot be fully specified in advance.
Design/methodology/approach: The construction of performance indicators at the urban level is examined through the lens of an action net (Czarniawska, 2004). The study investigates the case of a circular economy initiative in the city of Milan through group interviews, observations, and documentary analysis.
Findings: The study demonstrates that in cases of low contractibility, the development of circular economy solutions requires actions that span across organizational boundaries, which are organized in an action net. The findings reveal that as the action net unfolds, it is closely knotted with the construction of performance indicators, pointing towards the co-constitutive relationship between the two processes.
Originality/value: This study contributes to the public sector accounting literature by exploring the complexity of performance indicator construction at the urban level. It further recognises performance measurement in cities as a dynamic and flexible process, where the
interconnected actions and involvement of multiple actants shape the composition of the indicators.