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Projects and activities | 16 September 2020

Using social norms to increase tax compliance - a cross country study

Context

For governments, collecting tax is essential for financing publicly provided goods and services. Despite this, some people tend to evade taxes. Therefore, people's tax compliance behaviour is an issue that deserves our attention.

Evidence shows that highlighting that "most people pay their taxes" can increase tax compliance by leveraging peer pressure (and so negative feelings, such as shame, in tax evaders). Citizens' actual beliefs that other citizens do pay their taxes (that is, the strength of the social norm) could affect their own willingness to pay taxes.

Goals

The goal of this project is to investigate whether the strength of social norms affects tax compliance. We also aim to assess the link and interdependencies between the quality of governmental institutions and the strength of social norms.

Methods

We are:

  • analysing existing data on social norms and quality of government from different databases (for instance, the European Social Survey)
  • conducting a series of 19 laboratory experiments (called ‘public good’ games) in which participants take real decisions that mimic their behaviour with regard to paying taxes

Expected outcomes

The results of this project are expected to inform policies aimed at increasing tax compliance, by using soft interventions that leverage social norms.

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