What explains the North–South divide in Italian tax compliance? An experimental analysis
© Macmillan Publishers Ltd., part of Springer Nature 2018
Reason for embargo
Under embargo until 26 January 2019 in compliance with publisher policy
I undertake a comparative study assessing the North–South divide in Italian tax compliance, employing the largest behavioral tax compliance experiment to date. Contrary to a large body of literature, I argue that willingness to pay taxes is constructed within a specific institutional environment and reflects the country’s quality of institutions. To test this hypothesis, I use controlled tax compliance experiments from four laboratories in Capua, Rome, Bologna, and Milan. By employing the experimental method, I am able to hold institutions constant allowing me to isolate cultural variation. Contrary to cultural explanations for tax compliance, when controlling the institutional environment, there is no difference in tax compliance. Furthermore, using social value orientation to compare prosociality, I also find no differences between the two regions. I therefore conclude that individuals’ relationship to their states shapes these behavioral differences in tax compliance.
Funds for this research were provided by the European Research Council (Grant Agreement No. 295675 ).
This is the author accepted manuscript. The final version is available from Palgrave Macmillan via the DOI in this record
Published online 26 January 2018