Solo-authored dissertation. R&R at the Journal of Accounting Research
I study the interaction between digital reporting infrastructure and decentralized consumer monitoring in shaping tax compliance. Using comprehensive administrative tax data from a developing country, I show that while the mandatory adoption of real-time transaction recording devices establishes a digital paper trail, technology alone is insufficient to ensure full compliance, as firms use reporting discretion to offset increased revenue visibility. The introduction of high-powered consumer incentives, comprising rewards for receipt scanning and bounties for whistleblowing, generates significant incremental reporting gains. I disentangle these mechanisms to show they target distinct margins: rewards induce selective compliance for salient transactions, whereas whistle-blowing functions as a deterrence shock that disciplines the extensive margin of reporting. These effects are mediated by institutional credibility, tax regime, market structure, and social norms regarding state authority. Overall, my findings establish a complementarity between digital infrastructure and consumer financial incentives, demonstrating that in environments with limited traditional enforcement capacity, the ’last mile’ of tax formalization depends on the active, decentralized monitoring of the public.