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

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  • Nan Zhang
  • Giulia Andrighetto
  • Stefania Ottone
  • Ferruccio Ponzano
  • Sven Steinmo
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.

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  • Nan Zhang & Giulia Andrighetto & Stefania Ottone & Ferruccio Ponzano & Sven Steinmo, 2016. ""Willing to Pay?" Tax Compliance in Britain and Italy: An Experimental Analysis," PLOS ONE, Public Library of Science, vol. 11(2), pages 1-14, February.
    • Handle: RePEc:plo:pone00:0150277
    DOI: 10.1371/journal.pone.0150277
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    Cited by:

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    2. Guerra, Alice & Harrington, Brooke, 2018. "Attitude–behavior consistency in tax compliance: A cross-national comparison," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 184-205.
    3. Salvatore Capasso & Lorenzo Cicatiello & Elina De Simone & Lodovico Santoro, 2022. "Corruption and tax revenues: Evidence from Italian regions," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(4), pages 1129-1152, December.
    4. Todor Arpad, 2018. "Willing to pay to save the planet? Evaluating support for increased spending on sustainable development and environmentally friendly policies in five countries," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-15, November.
    5. Miloš Fišar & Tommaso Reggiani & Fabio Sabatini & Jiří Špalek, 2022. "Media negativity bias and tax compliance: experimental evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1160-1212, October.
    6. Giancarlo Ferrara & Arianna Campagna & Vincenzo Atella, 2019. "Disentangling tax evasion from inefficiency in firms tax declaration: an integrated approach," CEIS Research Paper 468, Tor Vergata University, CEIS, revised 06 Sep 2019.
    7. James Alm & Antoine Malézieux, 2021. "40 years of tax evasion games: a meta-analysis," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 699-750, September.
    8. Fabio Lamantia & Mario Pezzino, 2021. "Social norms and evolutionary tax compliance," Manchester School, University of Manchester, vol. 89(4), pages 385-405, July.
    9. John W D’Attoma & Clara Volintiru & Antoine Malézieux, 0. "Gender, Social Value Orientation, and Tax Compliance," CESifo Economic Studies, CESifo Group, vol. 66(3), pages 265-284.
    10. Samiji, Ally A. & Chegere, Martin J. & Ruhinduka, Remidius D., 2023. "The Effect of Carrot and Stick Measures in Fostering Taxpayer Compliance in Tanzania: Evidence from a Laboratory Experiment," African Journal of Economic Review, African Journal of Economic Review, vol. 11(5), December.
    11. V.A. Molodykh, 2021. "Impact of Short-Term Exogenous Shocks on Taxpayer Behavior and Tax Evasion," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(2), pages 241-268.
    12. Kogler, Christoph & Olsen, Jerome & Bogaers, Rebecca I., 2020. "Enhanced anonymity in tax experiments does not affect compliance," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 390-398.
    13. D’Attoma, John & Volintiru, Clara & Steinmo, Sven, 2017. "Willing to share? Tax compliance and gender in Europe and America," LSE Research Online Documents on Economics 89397, London School of Economics and Political Science, LSE Library.
    14. Alice Guerra & Brooke Harrington, 2023. "Regional variation in tax compliance and the role of culture," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 139-152, April.
    15. Mariella, Vitantonio, 2022. "The agrarian origins of social capital," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 543-568.
    16. Privitera, Alessandra & Enachescu, Janina & Kirchler, Erich & Hartmann, Andre Julian, 2021. "Emotions in Tax Related Situations Shape Compliance Intentions: A Comparison between Austria and Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 92(C).
    17. Stefania Ottone & Ferruccio Ponzano & Giulia Andrighetto, 2018. "Tax compliance under different institutional settings in Italy and Sweden: an experimental analysis," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 367-402, August.
    18. Engel, Christoph & Zamir, Eyal, 2024. "Is transparency a blessing or a curse? An experimental horse race between accountability and extortionary corruption," International Review of Law and Economics, Elsevier, vol. 78(C).

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