"Willing to Pay?" Tax Compliance in Britain and Italy: An Experimental Analysis

PLoS One. 2016 Feb 26;11(2):e0150277. doi: 10.1371/journal.pone.0150277. eCollection 2016.

Abstract

As shown by the recent crisis, tax evasion poses a significant problem for countries such as Greece, Spain and Italy. While these societies certainly possess weaker fiscal institutions as compared to other EU members, might broader cultural differences between northern and southern Europe also help to explain citizens' (un)willingness to pay their taxes? To address this question, we conduct laboratory experiments in the UK and Italy, two countries which straddle this North-South divide. Our design allows us to examine citizens' willingness to contribute to public goods via taxes while holding institutions constant. We report a surprising result: when faced with identical tax institutions, redistribution rules and audit probabilities, Italian participants are significantly more likely to comply than Britons. Overall, our findings cast doubt upon "culturalist" arguments that would attribute cross-country differences in tax compliance to the lack of morality amongst southern European taxpayers.

Publication types

  • Comparative Study
  • Research Support, Non-U.S. Gov't

MeSH terms

  • Adolescent
  • Adult
  • Aged
  • Attitude
  • Confidentiality
  • Cooperative Behavior*
  • Cross-Cultural Comparison
  • Cultural Characteristics
  • Decision Making
  • Female
  • Games, Experimental
  • Humans
  • Italy
  • Male
  • Middle Aged
  • Moral Obligations*
  • Remuneration
  • Stereotyping
  • Taxes*
  • United Kingdom
  • Young Adult

Grants and funding

The research leading to these results has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013)/ERC Grant Agreement n. [295675]. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.