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Fiscal transparency and tax ethics: does better information lead to greater compliance?

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  • Capasso, Salvatore
  • Cicatiello, Lorenzo
  • De Simone, Elina
  • Gaeta, Giuseppe Lucio
  • Mourão, Paulo Reis

Abstract

By relying on WVS data and using multilevel mixed modeling, the paper tests the hypothesis that access to larger flows of information about government fiscal accounts and financial transactions increases citizens’ willingness to pay taxes. By supporting such an hypothesis, our analysis suggests that in the presence of more information, the implicit contract between the government and taxpayers displays less stringent incentives and participation constraints and causes part of the contract, namely tax morale, to be enhanced. This finding supports the implementation of fiscal transparency policies, whose possible design is discussed.

Suggested Citation

  • Capasso, Salvatore & Cicatiello, Lorenzo & De Simone, Elina & Gaeta, Giuseppe Lucio & Mourão, Paulo Reis, 2021. "Fiscal transparency and tax ethics: does better information lead to greater compliance?," Journal of Policy Modeling, Elsevier, vol. 43(5), pages 1031-1050.
    • Handle: RePEc:eee:jpolmo:v:43:y:2021:i:5:p:1031-1050
    DOI: 10.1016/j.jpolmod.2020.06.003
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    Cited by:

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    2. Federico Ceschel & Alessandro Hinna & Fabian Homberg, 2022. "Public Sector Strategies in Curbing Corruption: A Review of the Literature," Public Organization Review, Springer, vol. 22(3), pages 571-591, September.
    3. Gnangnon, Sèna Kimm, 2022. "Internet, Participation in International Trade, and Tax Revenue Instability," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 37(2), pages 267-315.
    4. Ali Farazmand & Elina Simone & Giuseppe Lucio Gaeta & Salvatore Capasso, 2022. "Corruption, lack of Transparency and the Misuse of Public Funds in Times of Crisis: An introduction," Public Organization Review, Springer, vol. 22(3), pages 497-503, September.
    5. Martínez, Yolanda Ubago & Arzoz, Pedro Pascual & Arregui, Idoia Zabaleta, 2022. "Tax collection efficiency in OECD countries improves via decentralization, simplification, digitalization and education," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 298-318.

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    More about this item

    Keywords

    Tax morale; Fiscal transparency; Tax compliance; Corruption;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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