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Combining Psychology and Economics in the Analysis of Compliance: From Enforcement to Cooperation

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  • James Alm

    (Department of Economics, Tulane University, 6823 St. Charles Avenue, 208 Tilton Hall, New Orleans, LA 70118, U.S.A.)

  • Erich Kirchler

    (Universität Wien, Universitaetsstrasse 7, A-1010 Vienna, Austria)

  • Stephan Muehlbacher

    (Universität Wien, Universitaetsstrasse 7, A-1010 Vienna, Austria)

Abstract

In tax compliance research, there has been a significant shift in research paradigms, from an emphasis on enforcement to approaches that stress cooperation. In this paper, we trace this shift. We first describe the major “actors” in the tax compliance game and their complex interactions. Second, we examine various perspectives on the compliance decisions of individuals, starting with “economic” factors and then moving to factors based more on “psychology”, like social norms, fairness, and social interactions. Third, we present the “slippery slope” framework as a unifying framework. We conclude with recommendations based on this framework that have been shown to improve compliance.

Suggested Citation

  • James Alm & Erich Kirchler & Stephan Muehlbacher, 2012. "Combining Psychology and Economics in the Analysis of Compliance: From Enforcement to Cooperation," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 133-152, September.
    • Handle: RePEc:eee:ecanpo:v:42:y:2012:i:2:p:133-152
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    More about this item

    Keywords

    Tax evasion; behavioral economics; tax morale; intrinsic motivation; slippery slope framework;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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