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 Alarcon-Garcia; Ceyhan Aldemir; Oana Apostol; Diana Bank Weinberg; Joan Batrancea; Alexis Belianin; Felipe de Jesus Bello Gomez; 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 Kudla; Jeremy E. Lemoine; Supanika Leurcharusmee; Thorolfur Matthiasson; Sanjeev Mehta; Sejin Min; George Naufal; Mervi Niskanen; Katarina Nordblom; Engin Bagis Ozturk; Luis Pacheco; Jozsef Pantya; Vassilis Rapanos; Christine Roland-Levy; Ana Maria Roux-Cesar; Aidin Salamzadeh; Lucia Savadori; Vidar Scheibe; 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 (Corresponding author)
, 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 Alarcon-Garcia
, Ceyhan Aldemir
, Oana Apostol
, Diana Bank Weinberg
, Joan Batrancea
, Alexis Belianin
, Felipe de Jesus Bello Gomez

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 Kudla, Jeremy E. Lemoine, Supanika Leurcharusmee, Thorolfur Matthiasson, Sanjeev Mehta, Sejin Min, George Naufal, Mervi Niskanen, Katarina Nordblom, Engin Bagis Ozturk, Luis Pacheco, Jozsef Pantya, Vassilis Rapanos, Christine Roland-Levy, Ana Maria Roux-Cesar, Aidin Salamzadeh, Lucia Savadori, Vidar Scheibe, Manoj Sharma, Barbara Summers, Komsan Suriya, Quoc Tran, Clara Villegas-Palacio, Martine Visser, Chun Xia, Sunghwan Yi, Sarunas Zukauskas

Department of Occupational, Economic and Social Psychology

Publications: Contribution to journal › Article › Peer Reviewed

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 intentionsand 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
Number of pages	15
Journal	Journal of Economic Psychology
Volume	74
DOIs	https://doi.org/10.1016/j.joep.2019.102191
Publication status	Published - Oct 2019

Funding

We are grateful to James Mm, Ofer Azar, Eduard Brandstatter, Ernst Fehr, Benedikt Herrmann, Alan Lewis, Edoardo Lozza, Helgi Tomasson 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 Gliicksman, 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, Janos Bolyai Research Scholarship of the Hungarian Academy of Sciences Project number BO/01048/16/2, Conselho Nacional de Desenvolvimento Cientifico e Tecnologico 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.

Austrian Fields of Science 2012

501002 Applied psychology
501029 Economic psychology

Keywords

Trust
Power
Slippery slope framework
Tax compliance
Tax evasion
EVASION
PUNISHMENT
AUDIT
2960

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., Alarcon-Garcia, G., Aldemir, C., Apostol, O., Weinberg, D. B., Batrancea, J., 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

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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 intentionsand 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.",

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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 Alarcon-Garcia and Ceyhan Aldemir and Oana Apostol and Weinberg, \{Diana Bank\} and Joan Batrancea and Alexis Belianin and \{Bello Gomez\}, \{Felipe de Jesus\} 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 Kudla and Lemoine, \{Jeremy E.\} and Supanika Leurcharusmee and Thorolfur Matthiasson and Sanjeev Mehta and Sejin Min and George Naufal and Mervi Niskanen and Katarina Nordblom and Ozturk, \{Engin Bagis\} and Luis Pacheco and Jozsef Pantya and Vassilis Rapanos and Christine Roland-Levy and Roux-Cesar, \{Ana Maria\} and Aidin Salamzadeh and Lucia Savadori and Vidar Scheibe 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",

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

language = "English",

volume = "74",

journal = "Journal of Economic Psychology",

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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, Alarcon-Garcia, G, Aldemir, C, Apostol, O, Weinberg, DB, Batrancea, J, Belianin, A, Bello Gomez, 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, Kudla, J, Lemoine, JE, Leurcharusmee, S, Matthiasson, T, Mehta, S, Min, S, Naufal, G, Niskanen, M, Nordblom, K, Ozturk, EB, Pacheco, L, Pantya, J, Rapanos, V, Roland-Levy, C, Roux-Cesar, AM, Salamzadeh, A, Savadori, L, Scheibe, V, Sharma, M, Summers, B, Suriya, K, Quoc Tran, 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 - Alarcon-Garcia, Gloria

AU - Aldemir, Ceyhan

AU - Apostol, Oana

AU - Weinberg, Diana Bank

AU - Batrancea, Joan

AU - Belianin, Alexis

AU - Bello Gomez, Felipe de Jesus

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 - Kudla, Janusz

AU - Lemoine, Jeremy E.

AU - Leurcharusmee, Supanika

AU - Matthiasson, Thorolfur

AU - Mehta, Sanjeev

AU - Min, Sejin

AU - Naufal, George

AU - Niskanen, Mervi

AU - Nordblom, Katarina

AU - Ozturk, Engin Bagis

AU - Pacheco, Luis

AU - Pantya, Jozsef

AU - Rapanos, Vassilis

AU - Roland-Levy, Christine

AU - Roux-Cesar, Ana Maria

AU - Salamzadeh, Aidin

AU - Savadori, Lucia

AU - Scheibe, Vidar

AU - Sharma, Manoj

AU - Summers, Barbara

AU - Suriya, Komsan

AU - Quoc Tran, null

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 intentionsand 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 intentionsand 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 - Trust

KW - Power

KW - Slippery slope framework

KW - Tax compliance

KW - Tax evasion

KW - EVASION

KW - PUNISHMENT

KW - AUDIT

KW - 2960

UR - https://www.scopus.com/pages/publications/85071881819

U2 - 10.1016/j.joep.2019.102191

DO - 10.1016/j.joep.2019.102191

M3 - Article

SN - 0167-4870

VL - 74

JO - Journal of Economic Psychology

JF - Journal of Economic Psychology

M1 - 102191

ER -

Trust and power as determinants of tax compliance across 44 nations

Abstract

Funding

Austrian Fields of Science 2012

Keywords

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