Trust and power as determinants of tax compliance across 44 nations

Larissa Batrancea; Anca Nichita; Jerome Olsen; Christoph Kogler; Erich Kirchler; Erik Hoelzl; Avi Weiss; Benno Torgler; Jonas Fooken; Joanne Fuller; Markus Schaffner; Sheheryar Banuri; Medhat Hassanein; Gloria Alarcón-García; Ceyhan Aldemir; Oana Apostol; Diana Bank Weinberg; Ioan Batrancea; Alexis Belianin; Felipe de Jesús Bello Gómez; Marie Briguglio; Valerij Dermol; Elaine Doyle; Rebone Gcabo; Binglin Gong; Sara Ennya; Anthony Essel-Anderson; Jane Frecknall-Hughes; Ali Hasanain; Yoichi Hizen; Odilo Huber; Georgia Kaplanoglou; Janusz Kudła; Jérémy E. Lemoine; Supanika Leurcharusmee; Thorolfur Matthiasson; Sanjeev Mehta; Sejin Min; George Naufal; Mervi Niskanen; Katarina Nordblom; Engin Bağış Öztürk; Luis Pacheco; József Pántya; Vassilis Rapanos; Christine Roland-Lévy; Ana Maria Roux-Cesar; Aidin Salamzadeh; Lucia Savadori; Vidar Schei; Manoj Sharma; Barbara Summers; Komsan Suriya; Quoc Tran; Clara Villegas-Palacio; Martine Visser; Chun Xia; Sunghwan Yi; Sarunas Zukauskas

doi:10.1016/j.joep.2019.102191

Trust and power as determinants of tax compliance across 44 nations

Larissa Batrancea, Anca Nichita, Jerome Olsen, Christoph Kogler, Erich Kirchler, Erik Hoelzl, Avi Weiss, Benno Torgler, Jonas Fooken, Joanne Fuller, Markus Schaffner, Sheheryar Banuri, Medhat Hassanein, Gloria Alarcón-García, Ceyhan Aldemir, Oana Apostol, Diana Bank Weinberg, Ioan Batrancea, Alexis Belianin, Felipe de Jesús Bello GómezMarie Briguglio, Valerij Dermol, Elaine Doyle, Rebone Gcabo, Binglin Gong, Sara Ennya, Anthony Essel-Anderson, Jane Frecknall-Hughes, Ali Hasanain, Yoichi Hizen, Odilo Huber, Georgia Kaplanoglou, Janusz Kudła, Jérémy E. Lemoine, Supanika Leurcharusmee, Thorolfur Matthiasson, Sanjeev Mehta, Sejin Min, George Naufal, Mervi Niskanen, Katarina Nordblom, Engin Bağış Öztürk, Luis Pacheco, József Pántya, Vassilis Rapanos, Christine Roland-Lévy, Ana Maria Roux-Cesar, Aidin Salamzadeh, Lucia Savadori, Vidar Schei, Manoj Sharma, Barbara Summers, Komsan Suriya, Quoc Tran, Clara Villegas-Palacio, Martine Visser, Chun Xia, Sunghwan Yi, Sarunas Zukauskas

Department of Economics

Research output: Contribution to journal › Article › peer-review

105 Scopus citations

Abstract

The slippery slope framework of tax compliance emphasizes the importance of trust in authorities as a substantial determinant of tax compliance alongside traditional enforcement tools like audits and fines. Using data from an experimental scenario study in 44 nations from five continents (N = 14,509), we find that trust in authorities and power of authorities, as defined in the slippery slope framework, increase tax compliance intentions and mitigate intended tax evasion across societies that differ in economic, sociodemographic, political, and cultural backgrounds. We also show that trust and power foster compliance through different channels: trusted authorities (those perceived as benevolent and enhancing the common good) register the highest voluntary compliance, while powerful authorities (those perceived as effectively controlling evasion) register the highest enforced compliance. In contrast to some previous studies, the results suggest that trust and power are not fully complementary, as indicated by a negative interaction effect. Despite some between-country variations, trust and power are identified as important determinants of tax compliance across all nations. These findings have clear implications for authorities across the globe that need to choose best practices for tax collection.

Original language	English
Article number	102191
Journal	Journal of Economic Psychology
Volume	74
DOIs	https://doi.org/10.1016/j.joep.2019.102191
State	Published - Oct 2019

Bibliographical note

Publisher Copyright:
© 2019

Funding

We are grateful to James Alm, Ofer Azar, Eduard Brandstätter, Ernst Fehr, Benedikt Herrmann, Alan Lewis, Edoardo Lozza, Helgi Tómasson for their valuable comments. We would like to thank the following people (in alphabetical order) for assisting us along the data collection process: Avihood Baron, Aliaa Bassiouny, Maria Blom, Lynda Burkinshaw, Yanyou Chen, Katherine du Plessis, Heba El-Kordy, Estela Fernandez-Sabiote, Henrique Formigoni, Madeleine Glücksman, Talia Hadas, Masato Hiwatari, Tomasz Kopczewski, Nana Sefaah Kyei-Boadu, Maria Lage, Sergio Lex, Ruth Liprini, Siyu Lu, Josephine Maltby, Alicia Martinez-Serrano, Jose Manuel Mayor-Balsas, Phenyo Motswai, Minnette Nieuwoudt, Lynne Oats, Janine Ordman, Maxine Pietersen, Mordechai Schwartz, Liliane Cristina Segura, Tebogo Sole, Andrea Taylor, Branden Versfeld, Andley Wu. We also thank the faculty of the Department of Management, American University in Cairo. This work was financially supported by the following grants: Babes-Bolyai University Project number GTC 31780 , University of Hong Kong Seed Funding Programme number 20111115948 , János Bolyai Research Scholarship of the Hungarian Academy of Sciences Project number BO/01048/16/2 , Conselho Nacional de Desenvolvimento Científico e Tecnológico Project number 477668/2012-7 , Riksbankens Jubileumsfond Project number RS10-1319:1. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. We are grateful to James Alm, Ofer Azar, Eduard Brandst?tter, Ernst Fehr, Benedikt Herrmann, Alan Lewis, Edoardo Lozza, Helgi T?masson for their valuable comments. We would like to thank the following people (in alphabetical order) for assisting us along the data collection process: Avihood Baron, Aliaa Bassiouny, Maria Blom, Lynda Burkinshaw, Yanyou Chen, Katherine du Plessis, Heba El-Kordy, Estela Fernandez-Sabiote, Henrique Formigoni, Madeleine Gl?cksman, Talia Hadas, Masato Hiwatari, Tomasz Kopczewski, Nana Sefaah Kyei-Boadu, Maria Lage, Sergio Lex, Ruth Liprini, Siyu Lu, Josephine Maltby, Alicia Martinez-Serrano, Jose Manuel Mayor-Balsas, Phenyo Motswai, Minnette Nieuwoudt, Lynne Oats, Janine Ordman, Maxine Pietersen, Mordechai Schwartz, Liliane Cristina Segura, Tebogo Sole, Andrea Taylor, Branden Versfeld, Andley Wu. We also thank the faculty of the Department of Management, American University in Cairo. This work was financially supported by the following grants: Babes-Bolyai University Project number GTC 31780, University of Hong Kong Seed Funding Programme number 20111115948, J?nos Bolyai Research Scholarship of the Hungarian Academy of Sciences Project number BO/01048/16/2, Conselho Nacional de Desenvolvimento Cient?fico e Tecnol?gico Project number 477668/2012-7, Riksbankens Jubileumsfond Project number RS10-1319:1. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

Funders	Funder number
Conselho Nacional de Desenvolvimento Cient?fico e Tecnol?gico
Conselho Nacional de Desenvolvimento Científico e Tecnológico Project	477668/2012-7
Department of Management, American University in Cairo	20111115948, GTC 31780
Riksbankens Jubileumsfond Project	RS10-1319:1
Japan Society for the Promotion of Science	17K03769
Magyar Tudományos Akadémia	BO/01048/16/2
Riksbankens Jubileumsfond

Keywords

2960
Power
Slippery slope framework
Tax compliance
Tax evasion
Trust

Access to Document

10.1016/j.joep.2019.102191

Cite this

Batrancea, L., Nichita, A., Olsen, J., Kogler, C., Kirchler, E., Hoelzl, E., Weiss, A., Torgler, B., Fooken, J., Fuller, J., Schaffner, M., Banuri, S., Hassanein, M., Alarcón-García, G., Aldemir, C., Apostol, O., Bank Weinberg, D., Batrancea, I., Belianin, A., ... Zukauskas, S. (2019). Trust and power as determinants of tax compliance across 44 nations. Journal of Economic Psychology, 74, Article 102191. https://doi.org/10.1016/j.joep.2019.102191

@article{662ea144fe6e48f9af083c026081755d,

title = "Trust and power as determinants of tax compliance across 44 nations",

abstract = "The slippery slope framework of tax compliance emphasizes the importance of trust in authorities as a substantial determinant of tax compliance alongside traditional enforcement tools like audits and fines. Using data from an experimental scenario study in 44 nations from five continents (N = 14,509), we find that trust in authorities and power of authorities, as defined in the slippery slope framework, increase tax compliance intentions and mitigate intended tax evasion across societies that differ in economic, sociodemographic, political, and cultural backgrounds. We also show that trust and power foster compliance through different channels: trusted authorities (those perceived as benevolent and enhancing the common good) register the highest voluntary compliance, while powerful authorities (those perceived as effectively controlling evasion) register the highest enforced compliance. In contrast to some previous studies, the results suggest that trust and power are not fully complementary, as indicated by a negative interaction effect. Despite some between-country variations, trust and power are identified as important determinants of tax compliance across all nations. These findings have clear implications for authorities across the globe that need to choose best practices for tax collection.",

keywords = "2960, Power, Slippery slope framework, Tax compliance, Tax evasion, Trust",

author = "Larissa Batrancea and Anca Nichita and Jerome Olsen and Christoph Kogler and Erich Kirchler and Erik Hoelzl and Avi Weiss and Benno Torgler and Jonas Fooken and Joanne Fuller and Markus Schaffner and Sheheryar Banuri and Medhat Hassanein and Gloria Alarc{\'o}n-Garc{\'i}a and Ceyhan Aldemir and Oana Apostol and {Bank Weinberg}, Diana and Ioan Batrancea and Alexis Belianin and {Bello G{\'o}mez}, {Felipe de Jes{\'u}s} and Marie Briguglio and Valerij Dermol and Elaine Doyle and Rebone Gcabo and Binglin Gong and Sara Ennya and Anthony Essel-Anderson and Jane Frecknall-Hughes and Ali Hasanain and Yoichi Hizen and Odilo Huber and Georgia Kaplanoglou and Janusz Kud{\l}a and Lemoine, {J{\'e}r{\'e}my E.} and Supanika Leurcharusmee and Thorolfur Matthiasson and Sanjeev Mehta and Sejin Min and George Naufal and Mervi Niskanen and Katarina Nordblom and {\"O}zt{\"u}rk, {Engin Bağı{\c s}} and Luis Pacheco and J{\'o}zsef P{\'a}ntya and Vassilis Rapanos and Christine Roland-L{\'e}vy and Roux-Cesar, {Ana Maria} and Aidin Salamzadeh and Lucia Savadori and Vidar Schei and Manoj Sharma and Barbara Summers and Komsan Suriya and Quoc Tran and Clara Villegas-Palacio and Martine Visser and Chun Xia and Sunghwan Yi and Sarunas Zukauskas",

note = "Publisher Copyright: {\textcopyright} 2019",

year = "2019",

month = oct,

doi = "10.1016/j.joep.2019.102191",

language = "אנגלית",

volume = "74",

journal = "Journal of Economic Psychology",

issn = "0167-4870",

publisher = "Elsevier",

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Batrancea, L, Nichita, A, Olsen, J, Kogler, C, Kirchler, E, Hoelzl, E, Weiss, A, Torgler, B, Fooken, J, Fuller, J, Schaffner, M, Banuri, S, Hassanein, M, Alarcón-García, G, Aldemir, C, Apostol, O, Bank Weinberg, D, Batrancea, I, Belianin, A, Bello Gómez, FDJ, Briguglio, M, Dermol, V, Doyle, E, Gcabo, R, Gong, B, Ennya, S, Essel-Anderson, A, Frecknall-Hughes, J, Hasanain, A, Hizen, Y, Huber, O, Kaplanoglou, G, Kudła, J, Lemoine, JE, Leurcharusmee, S, Matthiasson, T, Mehta, S, Min, S, Naufal, G, Niskanen, M, Nordblom, K, Öztürk, EB, Pacheco, L, Pántya, J, Rapanos, V, Roland-Lévy, C, Roux-Cesar, AM, Salamzadeh, A, Savadori, L, Schei, V, Sharma, M, Summers, B, Suriya, K, Tran, Q, Villegas-Palacio, C, Visser, M, Xia, C, Yi, S & Zukauskas, S 2019, 'Trust and power as determinants of tax compliance across 44 nations', Journal of Economic Psychology, vol. 74, 102191. https://doi.org/10.1016/j.joep.2019.102191

TY - JOUR

T1 - Trust and power as determinants of tax compliance across 44 nations

AU - Batrancea, Larissa

AU - Nichita, Anca

AU - Olsen, Jerome

AU - Kogler, Christoph

AU - Kirchler, Erich

AU - Hoelzl, Erik

AU - Weiss, Avi

AU - Torgler, Benno

AU - Fooken, Jonas

AU - Fuller, Joanne

AU - Schaffner, Markus

AU - Banuri, Sheheryar

AU - Hassanein, Medhat

AU - Alarcón-García, Gloria

AU - Aldemir, Ceyhan

AU - Apostol, Oana

AU - Bank Weinberg, Diana

AU - Batrancea, Ioan

AU - Belianin, Alexis

AU - Bello Gómez, Felipe de Jesús

AU - Briguglio, Marie

AU - Dermol, Valerij

AU - Doyle, Elaine

AU - Gcabo, Rebone

AU - Gong, Binglin

AU - Ennya, Sara

AU - Essel-Anderson, Anthony

AU - Frecknall-Hughes, Jane

AU - Hasanain, Ali

AU - Hizen, Yoichi

AU - Huber, Odilo

AU - Kaplanoglou, Georgia

AU - Kudła, Janusz

AU - Lemoine, Jérémy E.

AU - Leurcharusmee, Supanika

AU - Matthiasson, Thorolfur

AU - Mehta, Sanjeev

AU - Min, Sejin

AU - Naufal, George

AU - Niskanen, Mervi

AU - Nordblom, Katarina

AU - Öztürk, Engin Bağış

AU - Pacheco, Luis

AU - Pántya, József

AU - Rapanos, Vassilis

AU - Roland-Lévy, Christine

AU - Roux-Cesar, Ana Maria

AU - Salamzadeh, Aidin

AU - Savadori, Lucia

AU - Schei, Vidar

AU - Sharma, Manoj

AU - Summers, Barbara

AU - Suriya, Komsan

AU - Tran, Quoc

AU - Villegas-Palacio, Clara

AU - Visser, Martine

AU - Xia, Chun

AU - Yi, Sunghwan

AU - Zukauskas, Sarunas

PY - 2019/10

Y1 - 2019/10

N2 - The slippery slope framework of tax compliance emphasizes the importance of trust in authorities as a substantial determinant of tax compliance alongside traditional enforcement tools like audits and fines. Using data from an experimental scenario study in 44 nations from five continents (N = 14,509), we find that trust in authorities and power of authorities, as defined in the slippery slope framework, increase tax compliance intentions and mitigate intended tax evasion across societies that differ in economic, sociodemographic, political, and cultural backgrounds. We also show that trust and power foster compliance through different channels: trusted authorities (those perceived as benevolent and enhancing the common good) register the highest voluntary compliance, while powerful authorities (those perceived as effectively controlling evasion) register the highest enforced compliance. In contrast to some previous studies, the results suggest that trust and power are not fully complementary, as indicated by a negative interaction effect. Despite some between-country variations, trust and power are identified as important determinants of tax compliance across all nations. These findings have clear implications for authorities across the globe that need to choose best practices for tax collection.

AB - The slippery slope framework of tax compliance emphasizes the importance of trust in authorities as a substantial determinant of tax compliance alongside traditional enforcement tools like audits and fines. Using data from an experimental scenario study in 44 nations from five continents (N = 14,509), we find that trust in authorities and power of authorities, as defined in the slippery slope framework, increase tax compliance intentions and mitigate intended tax evasion across societies that differ in economic, sociodemographic, political, and cultural backgrounds. We also show that trust and power foster compliance through different channels: trusted authorities (those perceived as benevolent and enhancing the common good) register the highest voluntary compliance, while powerful authorities (those perceived as effectively controlling evasion) register the highest enforced compliance. In contrast to some previous studies, the results suggest that trust and power are not fully complementary, as indicated by a negative interaction effect. Despite some between-country variations, trust and power are identified as important determinants of tax compliance across all nations. These findings have clear implications for authorities across the globe that need to choose best practices for tax collection.

KW - 2960

KW - Power

KW - Slippery slope framework

KW - Tax compliance

KW - Tax evasion

KW - Trust

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DO - 10.1016/j.joep.2019.102191

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VL - 74

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Trust and power as determinants of tax compliance across 44 nations

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Bibliographical note

Funding

Keywords

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