Public Choice

, Volume 144, Issue 1–2, pp 293–321

Local autonomy, tax morale, and the shadow economy

  • Benno Torgler
  • Friedrich Schneider
  • Christoph A. Schaltegger

DOI: 10.1007/s11127-009-9520-1

Cite this article as:
Torgler, B., Schneider, F. & Schaltegger, C.A. Public Choice (2010) 144: 293. doi:10.1007/s11127-009-9520-1


Policymakers often propose strict enforcement strategies to fight the shadow economy and to increase tax morale. However, there is an alternative bottom-up approach that decentralises political power to those who are close to the problems. This paper analyses the relationship with local autonomy. We use data on tax morale at the individual level and macro data on the size of the shadow economy to analyse the relevance of local autonomy and compliance in Switzerland. The findings suggest that there is a positive (negative) relationship between local autonomy and tax morale (size of the shadow economy).

Tax morale Shadow economy Tax compliance Tax evasion Local autonomy Federalism Institution 

JEL Classification

H260 H730 D700 

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  • Benno Torgler
    • 1
  • Friedrich Schneider
    • 2
  • Christoph A. Schaltegger
    • 3
  1. 1.The School of Economics and FinanceQueensland University of TechnologyBrisbaneAustralia
  2. 2.Department of EconomicsJohannes Kepler University of LinzLinz-AuhofAustria
  3. 3.EconomiesuisseUniversity of St. GallenZurichSwitzerland

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