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Russian Attitudes Toward Paying Taxes ? Before, During, and After the Transition

Author

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  • James Alm
  • Jorge Martinez-Vazquez
  • Benno Torgler

Abstract

This paper examines citizens? attitudes toward paying taxes ? what is sometimes termed their ?tax morale?, or the intrinsic motivation to pay taxes ? focusing on the experience of individuals in the Russian Federation. A unique aspect of our analysis is our ability to study tax morale before (1991), during (1995), and shortly after (1999) the transition of the Russian economy from a centrally planned economy to one based on market reliance. Our empirical analysis uses data from the World Values Survey and the European Values Survey. The results show decay in tax morale in the first four years of the transition from 1991 to 1995, and a small recovery in 1999. These results are consistent with the relevance of social norms in tax compliance, where the widespread perception of tax evasion and of a corrupt and inefficient state led initially to a decline of tax morale. However, the results also suggest that the restoration of a higher level of trust in the state, after some progress in the transition to a market economy, positively influenced tax morale. Using disaggregated data for Russian regions, we also find significant regional differences in tax morale, reflecting the degree of trust different regions have toward Moscow?s institutions and policies.

Suggested Citation

  • James Alm & Jorge Martinez-Vazquez & Benno Torgler, 2005. "Russian Attitudes Toward Paying Taxes ? Before, During, and After the Transition," CREMA Working Paper Series 2005-27, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2005-27
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    References listed on IDEAS

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    4. 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.
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    13. Torgler, Benno, 2002. " Speaking to Theorists and Searching for Facts: Tax Morale and Tax Compliance in Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 16(5), pages 657-683, December.
    14. Jorge Martinez-Vazquez & Robert McNab, 2000. "Tax Reform in The Tax Reform Experiment in Transitional Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0001, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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    Cited by:

    1. Benno Torgler & Maria A. Garcia-Valinas & Alison Macintyre, 2012. "Justifiability of Littering: An Empirical Investigation," Environmental Values, White Horse Press, vol. 21(2), pages 209-231, May.
    2. 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).
    3. Benno Torgler & Friedrich Schneider, 2007. "Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis," CREMA Working Paper Series 2007-02, Center for Research in Economics, Management and the Arts (CREMA).
    4. 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.
    5. Maria Arezzo, 2014. "Social Capital and Undeclared Work: An Empirical Analysis in Italy from 1998 to 2008," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(2), pages 695-709, September.
    6. Jan Schnellenbach, 2006. "Tax Morale and the Taming of Leviathan," Constitutional Political Economy, Springer, vol. 17(2), pages 117-132, June.
    7. Gaetano Lisi, 2012. "Testing the slippery slope framework," Economics Bulletin, AccessEcon, vol. 32(2), pages 1369-1377.

    More about this item

    Keywords

    tax morale; tax compliance; social norms; transition countries;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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