Digital Revenue Governance and Subnational Fiscal Autonomy: A Mediated Principal–Agent Analysis of Federated Tax Digitisation (Published)
This study investigated the impact of Digital Revenue Governance on Subnational Fiscal Autonomy within a federated fiscal system and modelled the institutional mechanism through which this relationship operated. A quasi-experimental design was employed using state-level monthly panel data from Nigeria’s 2025 digital tax reforms. The analysis applied difference-in-differences, event-study, instrumental-variable, and sequential mediation techniques to establish causal and transmission effects. The findings indicated that Digital Revenue Governance did not exert a direct effect on fiscal autonomy but operated through a sequential pathway. Specifically, digital adoption enhanced Subnational Fiscal Efficiency, which strengthened Accountable Revenue Mobilisation and subsequently consolidated Fiscal Autonomy. The direct effect attenuated after incorporating mediating variables, suggesting that fiscal autonomy emerged as a performance-based and lagged institutional outcome. The study concluded that digital tax reforms influenced fiscal decentralisation through improvements in administrative efficiency and revenue credibility rather than immediate structural changes. A key limitation was the short post-reform observation period. The study contributed by integrating principal–agent and fiscal federalism perspectives within a unified digital governance framework.
Keywords: digital governance, fiscal autonomy, principal–agent theory, revenue mobilisation, tax digitisation