IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v34y2013icp169-180.html
   My bibliography  Save this article

Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania and Russia

Author

Listed:
  • Kogler, Christoph
  • Batrancea, Larissa
  • Nichita, Anca
  • Pantya, Jozsef
  • Belianin, Alexis
  • Kirchler, Erich

Abstract

The slippery slope framework of tax compliance integrates different determinants of tax compliance and assigns them to one of two major dimensions. Accordingly, tax compliance depends on the factors perceived trust in the authorities and perceived power of the authorities, but trust on the one hand fosters voluntary compliance whereas power on the other hand leads to enforced compliance. The present study tested these main assumptions of the slippery slope framework in four European countries differing in terms of cultural and economic settings (Austria, Hungary, Romania and Russia) by presenting participants with different scenarios of trust and power. As predicted, the highest level of intended tax compliance and the lowest level of tax evasion were found in conditions of high trust and high power. In addition, participants in conditions of high trust indicate more voluntary compliance just as participants in conditions of high power indicate higher enforced compliance. The present results support the assumptions of the slippery slope framework and confirm the role of trust and power as important determinants of tax compliance.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:joepsy:v:34:y:2013:i:c:p:169-180
    DOI: 10.1016/j.joep.2012.09.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487012001109
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.joep.2012.09.010?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. Braithwaite, Valerie & Ahmed, Eliza, 2005. "A threat to tax morale: The case of Australian higher education policy," Journal of Economic Psychology, Elsevier, vol. 26(4), pages 523-540, August.
    2. 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.
    3. 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.
    4. Coleman, Stephen, 1996. "The Minnesota income tax compliance experiment: State tax results," MPRA Paper 4827, University Library of Munich, Germany.
    5. Bruno S. Frey, 1997. "Not Just for the Money," Books, Edward Elgar Publishing, number 1183.
    6. Torgler, Benno & Schneider, Friedrich, 2009. "The impact of tax morale and institutional quality on the shadow economy," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 228-245, April.
    7. James, Simon & Alley, Clinton, 2002. "Tax compliance, self-assessment and tax administration," MPRA Paper 26906, University Library of Munich, Germany.
    8. Elffers, Henk & Weigel, Russell H. & Hessing, Dick J., 1987. "The consequences of different strategies for measuring tax evasion behavior," Journal of Economic Psychology, Elsevier, vol. 8(3), pages 311-337, September.
    9. Pommerehne, Werner W. & Frey, Bruno S., 1992. "The effects of tax administration on tax morale," Discussion Papers, Series II 191, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    10. James Alm & Isabel Sanchez & Ana DE Juan, 1995. "Economic and Noneconomic Factors in Tax Compliance," Kyklos, Wiley Blackwell, vol. 48(1), pages 1-18, February.
    11. Benno Torgler & Kristina Murphy, 2004. "Tax Morale in Australia: What Shapes it and Has it Changed over Time?," CREMA Working Paper Series 2004-04, Center for Research in Economics, Management and the Arts (CREMA).
    12. Benno Torgler & Friedrich Schneider, 2004. "Does Culture Influence Tax Morale? Evidence from Different European Countries," CREMA Working Paper Series 2004-17, Center for Research in Economics, Management and the Arts (CREMA).
    13. 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.
    14. Frey, Bruno S., 2003. "Deterrence and tax morale in the European Union," European Review, Cambridge University Press, vol. 11(3), pages 385-406, July.
    15. Orviska, Marta & Hudson, John, 2003. "Tax evasion, civic duty and the law abiding citizen," European Journal of Political Economy, Elsevier, vol. 19(1), pages 83-102, March.
    16. 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.
    17. Friedrich Schneider & Andreas Buehn & Claudio Montenegro, 2010. "New Estimates for the Shadow Economies all over the World," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 443-461.
    18. Lago-Peñas, Ignacio & Lago-Peñas, Santiago, 2010. "The determinants of tax morale in comparative perspective: Evidence from European countries," European Journal of Political Economy, Elsevier, vol. 26(4), pages 441-453, December.
    19. Torgler, Benno, 2005. "Tax morale and direct democracy," European Journal of Political Economy, Elsevier, vol. 21(2), pages 525-531, June.
    20. Bruno S. Frey, 1992. "Tertium Datur: Pricing, Regulating and Intrinsic Motivation," Kyklos, Wiley Blackwell, vol. 45(2), pages 161-184, May.
    21. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
    22. Cummings, Ronald G. & Martinez-Vazquez, Jorge & McKee, Michael & Torgler, Benno, 2009. "Tax morale affects tax compliance: Evidence from surveys and an artefactual field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 447-457, June.
    23. Alm, James & Sanchez, Isabel & de Juan, Ana, 1995. "Economic and Noneconomic Factors in Tax Compliance," Kyklos, Wiley Blackwell, vol. 48(1), pages 3-18.
    24. Alm, James & Torgler, Benno, 2006. "Culture differences and tax morale in the United States and in Europe," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 224-246, April.
    25. 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.
    26. Frey, Bruno S, 1992. "Tertium Datur: Pricing, Regulating and Intrinsic Motivation," Kyklos, Wiley Blackwell, vol. 45(2), pages 161-184.
    27. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, number 9780521876742.
    28. Baldry, Jonathan C, 1987. "Income Tax Evasion and the Tax Schedule: Some Experimental Results," Public Finance = Finances publiques, , vol. 42(3), pages 357-383.
    29. Odd-Helge Fjeldstad, 2003. "What has trust got to do with it? Non-payment of service charges in local authorities in South Africa," CMI Working Papers WP 2003:12, CMI (Chr. Michelsen Institute), Bergen, Norway.
    30. Stephan Muehlbacher & Erich Kirchler & Herbert Schwarzenberger, 2011. "Voluntary versus enforced tax compliance: empirical evidence for the “slippery slope” framework," European Journal of Law and Economics, Springer, vol. 32(1), pages 89-97, August.
    31. 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.
    32. Benno Torgler, 2003. "Tax Morale, Rule-Governed Behaviour and Trust," Constitutional Political Economy, Springer, vol. 14(2), pages 119-140, June.
    33. Gaetano Lisi, 2012. "Testing the slippery slope framework," Economics Bulletin, AccessEcon, vol. 32(2), pages 1369-1377.
    34. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    35. Richardson, Grant, 2008. "The relationship between culture and tax evasion across countries: Additional evidence and extensions," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 17(2), pages 67-78.
    36. Hammar, Henrik & Jagers, Sverker C. & Nordblom, Katarina, 2009. "Perceived tax evasion and the importance of trust," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(2), pages 238-245, March.
    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, 2014. "Confronting the Shadow Economy," Books, Edward Elgar Publishing, number 15370.
    2. Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.
    3. Gebhard Kirchgässner, 2011. "Tax Morale, Tax Evasion and the Shadow Economy," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 10, Edward Elgar Publishing.
    4. 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.
    5. 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.
    6. Colin C. Williams & Friedrich Schneider, 2016. "Measuring the Global Shadow Economy," Books, Edward Elgar Publishing, number 16551.
    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. Rodriguez-Justicia, David & Theilen, Bernd, 2018. "Education and tax morale," Journal of Economic Psychology, Elsevier, vol. 64(C), pages 18-48.
    9. 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.
    10. Brizi, Ambra & Giacomantonio, Mauro & Schumpe, Birga M. & Mannetti, Lucia, 2015. "Intention to pay taxes or to avoid them: The impact of social value orientation," Journal of Economic Psychology, Elsevier, vol. 50(C), pages 22-31.
    11. 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).
    12. Konstantinos Fotiadis & Prodromos Chatzoglou, 2022. "The tax morale of exhausted taxpayers. The case of Greece," Constitutional Political Economy, Springer, vol. 33(3), pages 354-377, September.
    13. James Alm & Matthias Kasper, 2020. "Laboratory Experiments," Working Papers 2008, Tulane University, Department of Economics.
    14. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    15. 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.
    16. 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.
    17. 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.
    18. Gaetano Lisi, 2012. "Macroeconomic implications of the dynamics between power and trust: a theoretical formalisation of the ‘slippery slope’ framework," EERI Research Paper Series EERI_RP_2012_21, Economics and Econometrics Research Institute (EERI), Brussels.
    19. 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.
    20. 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.

    More about this item

    Keywords

    Tax compliance; Trust; Power; Cross-cultural; Slippery slope framework;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    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:34:y:2013:i:c:p:169-180. 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.