From Compliance to Adoption: A Theory-Building Study of Technology Implementation Gaps in Tax Administration

Administrations mandated to adopt audit technologies frequently achieve formal compliance while sustaining persistent gaps between policy and operational practice, a pattern that individual-level technology acceptance models cannot explain. This theory-building study develops an integrated framework combining institutional logics (IL) with Williamson’s new institutional economics (NIE) to explain how sociocultural pressures and economic constraints jointly produce and sustain these gaps. Using an abductive research design, we analyze Computer-Assisted Audit Tools and Techniques (CAATTs) implementation in Indonesia’s tax administration through document analysis and focus group discussions spanning three decades, constructing five propositions that specify the conditions under which collaborative, competing, and decoupling logics emerge, persist, and transition. The analysis reveals that regulatory absence produces collaborative logics as practitioners pool search costs through informal coordination, regulatory formalization triggers competing logics by shifting costs from search to enforcement, and the resulting cost gap between symbolic and substantive compliance produces decoupling that persists until governance investments reduce it. The study contributes to compliance risk governance by identifying the causal mechanisms through which institutional pressures and economic constraints interact during mandated technology adoption, offering testable propositions applicable to regulated organizations managing policy-practice gaps.