IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v74y2019ics0167487019301746.html
   My bibliography  Save this article

Trust and power as determinants of tax compliance across 44 nations

Author

Listed:
  • Batrancea, Larissa
  • Nichita, Anca
  • Olsen, Jerome
  • Kogler, Christoph
  • Kirchler, Erich
  • Hoelzl, Erik
  • Weiss, Avi
  • Torgler, Benno
  • Fooken, Jonas
  • Fuller, Joanne
  • Schaffner, Markus
  • Banuri, Sheheryar
  • Hassanein, Medhat
  • Alarcón-García, Gloria
  • Aldemir, Ceyhan
  • Apostol, Oana
  • Bank Weinberg, Diana
  • Batrancea, Ioan
  • Belianin, Alexis
  • Bello Gómez, Felipe de Jesús
  • Briguglio, Marie
  • Dermol, Valerij
  • Doyle, Elaine
  • Gcabo, Rebone
  • Gong, Binglin
  • Ennya, Sara
  • Essel-Anderson, Anthony
  • Frecknall-Hughes, Jane
  • Hasanain, Ali
  • Hizen, Yoichi
  • Huber, Odilo
  • Kaplanoglou, Georgia
  • Kudła, Janusz
  • Lemoine, Jérémy E.
  • Leurcharusmee, Supanika
  • Matthiasson, Thorolfur
  • Mehta, Sanjeev
  • Min, Sejin
  • Naufal, George
  • Niskanen, Mervi
  • Nordblom, Katarina
  • Öztürk, Engin Bağış
  • Pacheco, Luis
  • Pántya, József
  • Rapanos, Vassilis
  • Roland-Lévy, Christine
  • Roux-Cesar, Ana Maria
  • Salamzadeh, Aidin
  • Savadori, Lucia
  • Schei, Vidar
  • Sharma, Manoj
  • Summers, Barbara
  • Suriya, Komsan
  • Tran, Quoc
  • Villegas-Palacio, Clara
  • Visser, Martine
  • Xia, Chun
  • Yi, Sunghwan
  • Zukauskas, Sarunas

Abstract

The slippery slope framework of tax compliance emphasizes the importance of trust in authorities as a substantial determinant of tax compliance alongside traditional enforcement tools like audits and fines. Using data from an experimental scenario study in 44 nations from five continents (N = 14,509), we find that trust in authorities and power of authorities, as defined in the slippery slope framework, increase tax compliance intentions and mitigate intended tax evasion across societies that differ in economic, sociodemographic, political, and cultural backgrounds. We also show that trust and power foster compliance through different channels: trusted authorities (those perceived as benevolent and enhancing the common good) register the highest voluntary compliance, while powerful authorities (those perceived as effectively controlling evasion) register the highest enforced compliance. In contrast to some previous studies, the results suggest that trust and power are not fully complementary, as indicated by a negative interaction effect. Despite some between-country variations, trust and power are identified as important determinants of tax compliance across all nations. These findings have clear implications for authorities across the globe that need to choose best practices for tax collection.

Suggested Citation

  • Batrancea, Larissa & Nichita, Anca & Olsen, Jerome & Kogler, Christoph & Kirchler, Erich & Hoelzl, Erik & Weiss, Avi & Torgler, Benno & Fooken, Jonas & Fuller, Joanne & Schaffner, Markus & Banuri, She, 2019. "Trust and power as determinants of tax compliance across 44 nations," Journal of Economic Psychology, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:joepsy:v:74:y:2019:i:c:s0167487019301746
    DOI: 10.1016/j.joep.2019.102191
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487019301746
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.joep.2019.102191?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James Alm & Erich Kirchler & Stephan Muehlbacher & Katharina Gangl & Eva Hofmann & Christoph Kogler & Maria Pollai, 2012. "Rethinking the Research Paradigms for Analysing Tax Compliance Behaviour," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 33-40, July.
    2. Alm, James & Cherry, Todd & Jones, Michael & McKee, Michael, 2010. "Taxpayer information assistance services and tax compliance behavior," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 577-586, August.
    3. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    4. Kirchler, Erich & Wahl, Ingrid, 2010. "Tax compliance inventory TAX-I: Designing an inventory for surveys of tax compliance," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 331-346, June.
    5. Lars P. Feld & Bruno S. Frey, 2002. "Trust breeds trust: How taxpayers are treated," Economics of Governance, Springer, vol. 3(2), pages 87-99, July.
    6. James Alm & Benno Torgler, 2011. "Do Ethics Matter? Tax Compliance and Morality," Journal of Business Ethics, Springer, vol. 101(4), pages 635-651, July.
    7. Slemrod, Joel & Blumenthal, Marsha & Christian, Charles, 2001. "Taxpayer response to an increased probability of audit: evidence from a controlled experiment in Minnesota," Journal of Public Economics, Elsevier, vol. 79(3), pages 455-483, March.
    8. Michael Muthukrishna & Patrick Francois & Shayan Pourahmadi & Joseph Henrich, 2017. "Corrupting cooperation and how anti-corruption strategies may backfire," Nature Human Behaviour, Nature, vol. 1(7), pages 1-5, July.
    9. Kirchler, Erich & Hoelzl, Erik & Wahl, Ingrid, 2008. "Enforced versus voluntary tax compliance: The "slippery slope" framework," Journal of Economic Psychology, Elsevier, vol. 29(2), pages 210-225, April.
    10. Wenzel, Michael, 2004. "An analysis of norm processes in tax compliance," Journal of Economic Psychology, Elsevier, vol. 25(2), pages 213-228, April.
    11. Frey, Bruno S., 2003. "Deterrence and tax morale in the European Union," European Review, Cambridge University Press, vol. 11(3), pages 385-406, July.
    12. Ernst Fehr & Bettina Rockenbach, 2003. "Detrimental effects of sanctions on human altruism," Nature, Nature, vol. 422(6928), pages 137-140, March.
    13. Jeremy Clark & Lana Friesen & Andrew Muller, 2004. "The Good, the Bad, and the Regulator: An Experimental Test of Two Conditional Audit Schemes," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 69-87, January.
    14. Bergman, Marcelo & Nevarez, Armando, 2006. "Do Audits Enhance Compliance? An Empirical Assessment of VAT Enforcement," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(4), pages 817-832, December.
    15. Filippos Exadaktylos & Antonio M. Espin & Pablo Branas-Garza, 2012. "Experimental Subjects are Not Different," Working Papers 12-11, Chapman University, Economic Science Institute.
    16. Kaplanoglou, Georgia & Rapanos, Vassilis T., 2015. "Why do people evade taxes? New experimental evidence from Greece," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 21-32.
    17. van Dijke, Marius & Verboon, Peter, 2010. "Trust in authorities as a boundary condition to procedural fairness effects on tax compliance," Journal of Economic Psychology, Elsevier, vol. 31(1), pages 80-91, February.
    18. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, number 9780521876742, September.
    19. Baldry, Jonathan C, 1987. "Income Tax Evasion and the Tax Schedule: Some Experimental Results," Public Finance = Finances publiques, , vol. 42(3), pages 357-383.
    20. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    21. Gaetano Lisi, 2012. "Testing the slippery slope framework," Economics Bulletin, AccessEcon, vol. 32(2), pages 1369-1377.
    22. Kogler, Christoph & Batrancea, Larissa & Nichita, Anca & Pantya, Jozsef & Belianin, Alexis & Kirchler, Erich, 2013. "Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania and Russia," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 169-180.
    23. Christoph Kogler & Stephan Muehlbacher & Erich Kirchler, 2015. "Testing the “slippery slope framework” among self-employed taxpayers," Economics of Governance, Springer, vol. 16(2), pages 125-142, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colin C. Williams & Friedrich Schneider, 2016. "Measuring the Global Shadow Economy," Books, Edward Elgar Publishing, number 16551.
    2. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.
    3. Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.
    4. Colin C. Williams, 2014. "Confronting the Shadow Economy," Books, Edward Elgar Publishing, number 15370.
    5. Semjén, András, 2017. "Az adózói magatartás különféle magyarázatai [Various explanations for tax compliance]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 140-184.
    6. Kogler, Christoph & Batrancea, Larissa & Nichita, Anca & Pantya, Jozsef & Belianin, Alexis & Kirchler, Erich, 2013. "Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania and Russia," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 169-180.
    7. Christoph Kogler & Stephan Muehlbacher & Erich Kirchler, 2015. "Testing the “slippery slope framework” among self-employed taxpayers," Economics of Governance, Springer, vol. 16(2), pages 125-142, May.
    8. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    9. Colin C Williams & Ioana A Horodnic, 2017. "Evaluating the policy approaches for tackling undeclared work in the European Union," Environment and Planning C, , vol. 35(5), pages 916-936, August.
    10. Batrancea, Larissa M. & Kudła, Janusz & Błaszczak, Barbara & Kopyt, Mateusz, 2022. "Differences in tax evasion attitudes between students and entrepreneurs under the slippery slope framework," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 464-482.
    11. Kasper, Matthias & Kogler, Christoph & Kirchler, Erich, 2015. "Tax policy and the news: An empirical analysis of taxpayers’ perceptions of tax-related media coverage and its impact on tax compliance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 54(C), pages 58-63.
    12. Colin Williams, 2020. "Evaluating Public Administration Approaches towards Tax Non-Compliance in Europe," Administrative Sciences, MDPI, vol. 10(3), pages 1-15, July.
    13. Larissa M. Batrancea & Anca Nichita & Ruggero Agostini & Fabricio Batista Narcizo & Denis Forte & Samuel Paiva Neves Mamede & Ana Maria Roux-Cesar & Bozhidar Nedev & Leoš Vitek & József Pántya & Aidin, 2022. "A self-employed taxpayer experimental study on trust, power, and tax compliance in eleven countries," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-23, December.
    14. James Alm & Matthias Kasper, 2020. "Laboratory Experiments," Working Papers 2008, Tulane University, Department of Economics.
    15. Gaetano Lisi, 2019. "Slippery slope framework, tax morale and tax compliance: a theoretical integration and an empirical assessment," Discussion Papers in Economic Behaviour 0219, University of Valencia, ERI-CES.
    16. Colin C Williams & Junhong Yang, 2017. "Tackling falsely-declared salaries in Bulgaria: evidence from a 2015 survey," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 333-351, September.
    17. Gobena, Lemessa Bayissa & Van Dijke, Marius, 2016. "Power, justice, and trust: A moderated mediation analysis of tax compliance among Ethiopian business owners," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 24-37.
    18. Fábio Pereira Silva & Reinaldo Guerreiro & Eduardo Flores, 2019. "Voluntary versus enforced tax compliance: the slippery slope framework in the Brazilian context," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(2), pages 147-180, June.
    19. Ahmad Farhan Alshira’h & Moh’d Alsqour & Abdalwali Lutfi & Adi Alsyouf & Malek Alshirah, 2020. "A Socio-Economic Model of Sales Tax Compliance," Economies, MDPI, vol. 8(4), pages 1-15, October.
    20. C Williams, Colin, 2021. "Explaining And Tackling Undeclared Work In South East Europe: Lessons From A 2019 Eurobarometer Survey," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 12(1), pages 1-18.

    More about this item

    Keywords

    Trust; Power; Slippery slope framework; Tax compliance; Tax evasion;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:74:y:2019:i:c:s0167487019301746. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/joep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.