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Referendums, trust, and tax evasion

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  • Hug, Simon
  • Spörri, Franziska
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    Abstract

    Countries engaged in transitions from Communist rule to democracy and market economies face a considerable challenge to foster tax morale and to reduce tax evasion. Tax evasion, however, severely limits the capacities of these reformed states, which reduces in a vicious circle the citizens' incentives to pay taxes. The question then arises how this vicious circle may be broken. Several authors suggest that political institutions may do the trick. Based on insights that institutions allowing a direct say on policy issues (especially tax questions) may increase tax morale, we propose to study comparatively how the link between trust and tax morale is affected by these institutions. We find that allowing for referendums strengthens the link between trust and tax morale, but that this effect depends on the nature of the institutions.

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    Bibliographic Info

    Article provided by Elsevier in its journal European Journal of Political Economy.

    Volume (Year): 27 (2011)
    Issue (Month): 1 (March)
    Pages: 120-131

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    Handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:120-131

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    Web page: http://www.elsevier.com/locate/inca/505544

    Related research

    Keywords: Tax morale Trust Political institutions Referendums;

    References

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    Citations

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    Cited by:
    1. Maurizio Bovi & Roy Cerqueti, 2014. "A quantitative view on policymakers’ goal, institutions and tax evasion," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1493-1510, May.
    2. Djanali, Iwan & Sheehan-Connor, Damien, 2012. "Tax affinity hypothesis: Do we really hate paying taxes?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 758-775.
    3. Cécile Bazart & Aurélie Bonein, 2012. "Reciprocal Relationships in Tax Compliance Decisions," Working Papers 12-35, LAMETA, Universtiy of Montpellier, revised Dec 2012.
    4. Russo, Francesco Flaviano, 2013. "Tax morale and tax evasion reports," Economics Letters, Elsevier, vol. 121(1), pages 110-114.
    5. Désirée Teobaldelli & Friedrich Schneider, 2013. "The influence of direct democracy on the shadow economy," Public Choice, Springer, vol. 157(3), pages 543-567, December.
    6. Libman, Alexander, 2012. "Перераспределительные Конфликты И Факторы Культуры В Новой Политической Экономии
      [Redistributive Conflicts and Culture in the
      ," MPRA Paper 48192, University Library of Munich, Germany.
    7. d'Agostino, Giorgio & Scarlato, Margherita, 2012. "Inclusive Institutions, Innovation and Economic Growth: Estimates for European Countries," MPRA Paper 43098, University Library of Munich, Germany.

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