Tax Morale and Conditional Cooperation

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Tax Morale and Conditional Cooperation

Author Info

Bruno S. Frey
Benno Torgler

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Abstract

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax morale.

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Publisher Info
Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2006-11.

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Date of creation: Apr 2006
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Handle: RePEc:cra:wpaper:2006-11

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Article
- Frey, Bruno S. & Torgler, Benno, 2007. "Tax morale and conditional cooperation," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 136-159, March. [Downloadable!] (restricted)
Paper
- Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," IEW - Working Papers iewwp286, Institute for Empirical Research in Economics - IEW. [Downloadable!]

Find related papers by JEL classification:
H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
D64 - Microeconomics - - Welfare Economics - - - Altruism

This paper has been announced in the following NEP Reports:

NEP-ACC-2006-05-06 (Accounting & Auditing)
NEP-ALL-2006-05-06 (All new papers)
NEP-EEC-2006-05-06 (European Economics)
NEP-PBE-2006-05-06 (Public Economics)
NEP-PUB-2006-05-06 (Public Finance)
NEP-SOC-2006-05-06 (Social Norms & Social Capital)

Cited by:
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Benedek, Dora & Lelkes, Orsolya, 2009. "The distributional implications of income underreporting in Hungary," MPRA Paper 17308, University Library of Munich, Germany. [Downloadable!]
Lars P. Feld & Benno Torgler, 2007. "Tax Morale after the Reunification of Germany: Results from a Quasi-Natural Experiment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Other versions:
- Lars P. Feld & Benno Torgler, 2007. "Tax Morale after the Reunification of Germany: Results from a Quasi-Natural Experiment," School of Economics and Finance Discussion Papers and Working Papers Series 209, School of Economics and Finance, Queensland University of Technology. [Downloadable!]
- Lars P. Feld & Benno Torgler, 2007. "Tax Morale after the Reunification of Germany: Results from a Quasi-Natural Experiment," CREMA Working Paper Series 2007-03, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
Benedek, Dora & Lelkes, Orsolya, 2009. "The distributional implications of income underreporting in Hungary," MPRA Paper 17287, University Library of Munich, Germany. [Downloadable!]
Jorge Martinez-Vazquez & Benno Torgler, 2007. "The Evolution of Tax Morale in Modern Spain," School of Economics and Finance Discussion Papers and Working Papers Series 224, School of Economics and Finance, Queensland University of Technology, revised 12 Aug 2008. [Downloadable!]
Other versions:
- Jorge Martinz-Vazquez & Benno Torgler, 2005. "The Evolution of Tax Morale in Modern Spain," CREMA Working Paper Series 2005-33, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
- Jorge Martinez-Vazquez & Benno Torgler, 2007. "The Evolution of Tax Morale in Modern Spain," International Studies Program Working Paper Series, at AYSPS, GSU paper0719, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
- Benno Torgler & Jorge Martinez-Vazquez, 2005. "The Evolution of Tax Morale in Modern Spain," International Studies Program Working Paper Series, at AYSPS, GSU paper0521, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
- Jorge Martinez-Vazquez & Benno Torgler, 2007. "The Evolution of Tax Morale in Modern Spain," Working Papers 03-2007, Institute of Local Public Finance. [Downloadable!]
- Jorge Martinez-Vazquez & Benno Torgler, 2009. "The Evolution of Tax Morale in Modern Spain," Journal of Economic Issues, Inderscience Enterprises Ltd, vol. 0(1), pages 1-28, March. [Downloadable!] (restricted)
Benno Torgler & Christoph A. Schaltegger, 2006. "Tax Morale: A Survey with a Special Focus on Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(III), pages 395-425, September. [Downloadable!]
Traxler, Christian, 2006. "Social Norms and Conditional Cooperative Taxpayers," Discussion Papers in Economics 1202, University of Munich, Department of Economics. [Downloadable!]
Lars P. Feld & Benno Torgler & Bin Ding, 2008. "Coming Closer? Tax Morale, Deterrence and Social Learning after German Unification," School of Economics and Finance Discussion Papers and Working Papers Series 232, School of Economics and Finance, Queensland University of Technology, revised 16 Jun 2008. [Downloadable!]
Other versions:
- Lars P. Feld & Benno Torgler & Bin Dong, 2008. "Coming Closer? Tax Morale, Deterrence and Social Learning after German Unification," CREMA Working Paper Series 2008-09, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
Torgler, Benno & Demir, Ihsan C. & Macintyre, Alison & Schaffner, Markus, 2008. "Causes and Consequences of Tax Morale: An Empirical Investigation," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 38(2), pages 313-339, September. [Downloadable!]
Other versions:
- Benno Torgler & Markus Schaffner, 2007. "Causes and Consequences of Tax Morale: An Empirical Investigation," School of Economics and Finance Discussion Papers and Working Papers Series 222, School of Economics and Finance, Queensland University of Technology. [Downloadable!]
- Benno Torgler & Markus Schaffner, 2007. "Causes and Consequences of Tax Morale: An Empirical Investigation," CREMA Working Paper Series 2007-11, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
Halla, Martin & Schneider, Friedrich, 2008. "Taxes and Benefits: Two Distinct Options to Cheat on the State?," IZA Discussion Papers 3536, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Martin Halla & Friedrich G. Schneider, 2005. "Taxes and Benefits: Two Distinct Options to Cheat on the State?," Economics working papers 2005-05, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
Bin Dong & Uwe Dulleck & Benno Torgler, 2009. "Conditional Corruption," School of Economics and Finance Discussion Papers and Working Papers Series 241, School of Economics and Finance, Queensland University of Technology. [Downloadable!]
Other versions:
- Bin Dong & Uwe Dulleck & Benno Torgler, 2008. "Conditional Corruption," CREMA Working Paper Series 2008-29, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
Konrad, Kai A. & Qari, Salmai, 2009. "The Last Refuge of a Scoundrel? Patriotism and Tax Compliance," IZA Discussion Papers 4121, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Konrad, Kai A & Qari, Salmai, 2009. "The last refuge of a scoundrel? Patriotism and tax compliance," CEPR Discussion Papers 7215, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Robert Ullmann & Christoph Watrin, 2008. "Comparing Direct and Indirect Taxation: The Influence of Framing on Tax Compliance," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 5(1), pages 23-56, June. [Downloadable!]

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