The Social Network of Firms: Can Social Incentives and Taxpayer Recognition Improve Tax Compliance?

Abstract

Improving tax revenue collection is an important priority for developing economies throughout the world. A number of developing countries, including Bangladesh, have explored using social pressure to induce compliance, but this approach has yet to be rigorously evaluated. Social pressure has the advantage of being inexpensive and available even in environments without the regulatory and institutional frameworks to conduct an audit-based enforcement regime. Our project evaluates a peer recognition program for businesses in the urban environment of Dhaka, Bangladesh