The ghost of institutions past: History as an obstacle to fighting tax evasion?
- Author(s)
- Christian Koch, Aaron Kamm, Nikos Nikiforakis
- Abstract
Can a history of evasion affect tax compliance after a major institutional reform? We address this question in a novel laboratory experiment varying the quality of past and present institutions. We find that past institutions continue to exert considerable influence on individuals’ expectations about others’ compliance even after a major, common-knowledge institutional change. Consequently, we observe low compliance in good-quality institutions when there is a history of evasion, but high compliance when there is no such history. These findings suggest that history should not be ignored as it is in traditional models of compliance: the higher evasion has been historically, the stronger incentives may need to be to overcome the “ghost of institutions past”. We show that a society-wide poll in which individuals express their attitudes toward compliance can help break the link with the past.
- Organisation(s)
- Department of Economics
- External organisation(s)
- University of Melbourne, New York University Abu Dhabi
- Journal
- European Economic Review
- Volume
- 132
- No. of pages
- 17
- ISSN
- 0014-2921
- DOI
- https://doi.org/10.1016/j.euroecorev.2020.103641
- Publication date
- 02-2021
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502045 Behavioural economics
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Finance
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/the-ghost-of-institutions-past-history-as-an-obstacle-to-fighting-tax-evasion(9b170ae9-d6c6-4d96-9d55-4e890c9c71ef).html