Nstitutional Factors Associated With Tax Morale: a Country Group-Level Analysis

Authors: A.-O. Iacobuta, Doctor of Sciences (Economics), Associate professor, Alexandru Ioan Cuza University of Iasi, Faculty of Economics and Business Administration, Iasi, Romania,
G. C. Mursa,  Doctor of Sciences (Economics), Professor, Head of Department of Economics and International Relations, Alexandru Ioan Cuza University of Iasi, Faculty of Economics and Business Administration, Iasi, Romania,

Abstract: A growing literature coming from economics, sociology or psychology explores the wide range of variables that might explain voluntary compliance behaviour. The aim of this paper is to identify the in stitutional factors associated with tax morale and to highlight the resemblances and the differences among several countries across the world, grouped according to the level of development. Descriptive statistics and principal components analysis are used as methods and the analysis is carried out at country group level. The main results show that no matter the level of development, people’ intrinsic motivation to pay taxes can be associated with good institutions and government ability to efficiently allocate public funds.

Key words: tax morale, stage of development, institutions, government, corruption, principal components analysis

Received: 26/07/2018

1st Revision: 20/08/18

Accepted: 10/10/2018

DOI: https://doi.org/10.17721/1728-2667.2018/201-6/10

References

Cummings, R. G., Martinez-Vazquez, J., McKee, M. and Torgler, B., 2009. Tax Morale Affects Tax Compliance: Evidence from Surveys and an Artefactual Field Experiment. Journal of Economic Behavior & Organization, 70 (3), pp.447- 457. DOI: 10.1016/j.jebo.2008.02.010
Daude, C., Gutierrez, H. and Melguizo, A., 2012. What Drives Tax Morale? Working Paper No. 315. OECD Development Centre: http://www.oecd-ilibrary.org/development/what-drives-tax-morale_5k8zk8m61kzq-en.
Feld, L.P. and Frey, B.S., 2007. Tax Evasion, Tax Amnesties and the Psychological Tax Contract. International Studies Program Andrew Young School of Policy Studies Georgia State University: http://icepp.gsu.edu/files/2015/03/ispwp0729.pdf.
Frey, B. S. and Torgler, B., 2007. Tax Morale and Conditional Cooperation. Journal of Comparative Economics, 35, pp.136-159. DOI: 10.1016/j.jce.2006.10.006.
Iacobuta, A.O., Viorica, E.D. and Asandului, M., 2016. Institutional Factors Associated with Tax Morale. Paper presented at the 20th International Conference “Ethics in Economic Life”. Lodz, Poland. Abstract published in Proceedings (2016). Lodz University Press, V. 69.
Morin, A., 2016. Study Says Cheating May Help You Get Ahead, But You’ll Lose More in The End. Forbes Magazine: https://www.forbes.com/sites/amymorin/2016/05/07/study-says-cheating-may-help-you-get-ahead-but-youll-lose-more-in-the- end/#13a9b06965ef.
Smith, K. W., 1992. Reciprocity and Fairness: Positive Incentives for Tax Compliance. In: J. Slemrod (ed.). Why People Pay Taxes. Tax Compliance and Enforcement. Ann Arbor: University of Michigan Press, pp.223-258.
Torgler, B., 2003. Tax Morale in Transition Countries. Post-Communist Economies, 15(3), pp.357-381. DOI: 10.1080/1463137032000139052
Torgler, B., 2004. Tax morale in Asian countries. Journal of Asian Economics, V. 15, pp.237-266.
Torgler, B., 2011. Tax Morale and Compliance Review of Evidence and Case Studies for Europe. Policy Research Working Paper 5922. World Bank:http://documents.worldbank.org/curated/en/862221468282310839/pdf/WPS5922.pdf.
Torgler, B. and Schneider, F., 2007. Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis. IZA DP 2563: https://pdfs.semanticscholar.org/c749/7fcea37ef43552a0e848ce930120728384d6.pdf.
Torgler, B. and Schneider, F., 2009. The impact of tax morale and institutional quality on the shadow economy. Journal of Economic Psychology, 30(2), pp.228-245. DOI: 10.1016/j.joep.2008.08.004.
Williams, C.C. and Krasniqi, B.A., 2017. Evaluating the individual- and country-level variations in tax morale: Evidence from 35 Eurasian countries. Journal of Economic Studies, 44 (5), pp.816-832. DOI: 10.1108/JES-09-2016-0182

Download