Economia Politica

, Volume 35, Issue 2, pp 367–402 | Cite as

Tax compliance under different institutional settings in Italy and Sweden: an experimental analysis

  • Stefania OttoneEmail author
  • Ferruccio Ponzano
  • Giulia Andrighetto


In this paper, we study how people from different countries would react to institutional changes in terms of tax compliance. We choose an experimental setting and focus on two features of the tax system: efficiency and tax rate. We develop our analysis in two countries characterized by high tax burdens, but with relevant differences in terms of tax evasion and the quality of public services: Italy and Sweden. The main result is that participants from both countries react similarly to changes in efficiency and tax rates: tax compliance rises when efficiency increases, and tax compliance falls when the tax rate increases. However, the absolute level of tax compliance depends on the population’s composition in terms of social preferences (prosocials and individualists). This may suggest that, even if cultural factors matter, institutional features—especially efficiency—play a relevant role in determining taxpayers’ behavior. In particular, if the level of efficiency is high, both Italians and Swedes tend to pay taxes when the tax burden is high. We conclude the paper by discussing related policy implications.


Tax compliance Fiscal harmonization Cross-country comparison Cultural difference Efficiency 

JEL Classification

C9 D31 H26 



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.

Supplementary material

40888_2018_93_MOESM1_ESM.docx (71 kb)
Supplementary material 1 (DOCX 71 kb)


  1. Ackermann, K. A., Fleiss, J., & Murphy, R. O. (2016). Reciprocity as individual difference. Journal of Conflict Resolution, 60(2), 340–367.CrossRefGoogle Scholar
  2. Alm, J. (1998). Tax Compliance and administration. In Working Paper. Boulder: University of Colorado.Google Scholar
  3. Alm, J. (2012). Measuring, explaining, and controlling tax evasion: Lessons from theory, experiments, and field studies. In Tulane Economics Working Paper Series, WP 1213.Google Scholar
  4. Alm, J., Jackson, B., & McKee, M. (1992a). Deterrence and Beyond: Toward a Kinder. In I. R. S. Gentler (Ed.), Why People Pay Taxes: Tax Compliance and Enforcement, Joel Slemrod (pp. 311–329). Ann Arbor: The University of Michigan Press.Google Scholar
  5. Alm, J., McClelland, G. H., & Schulze, W. D. (1992b). Why do people pay taxes? Journal of Public Economics, 48, 21–38.CrossRefGoogle Scholar
  6. Alm, J., Sanchez, I., & de Juan, A. (1995). Economic and noneconomic factors in tax compliance. Kyklos, 48(1), 3–18.CrossRefGoogle Scholar
  7. Alm, J., & Torgler, B. (2006). Culture differences and tax morale in the United States and in Europe. Journal of Economic Psychology, 27(2), 224–246.CrossRefGoogle Scholar
  8. Andrighetto, G., Brandts, J., Conte, R., Sabater, J., Solaz, H., & Villatoro, D. (2013). Punish and voice: Punishment enhances cooperation when combined with norm-signalling. PLoS One, 8(6), 1–8.CrossRefGoogle Scholar
  9. Andrighetto, G., Zhang, N., Ottone, S., Ponzano, F., D’Attoma, J., & Steinmo, S. (2016). Are some countries more honest than others? Evidence from a tax compliance experiment in Sweden and Italy. Frontiers in Psychology, 7, 472.CrossRefGoogle Scholar
  10. Barone, G., & Mocetti, S. (2011). Tax morale and public spending inefficiency. International Tax and Public Finance, 18(6), 724–749.CrossRefGoogle Scholar
  11. Bergman, M. (2009). Tax Evasion and the Rule of Law in Latin America. The Political Culture of Cheating and Compliance in Argentina and Chile. University Park: Penn State University Press.Google Scholar
  12. Bicchieri, C. (2006). The Grammar of Society: The Nature and Dynamics of Social Norms. Cambridge: Cambridge University Press.Google Scholar
  13. Bobek, D. D., Hageman, A. M., & Kelliher, C. F. (2013). Analysing the role of social norms in tax compliance behaviour. Journal of Business Ethics, 115(3), 451–468.CrossRefGoogle Scholar
  14. Bordignon, M. (1993). A fairness approach to income tax evasion. Journal of Public Economics, 52, 345–362.CrossRefGoogle Scholar
  15. Bosco, L., & Mittone, L. (1997). Tax evasion and moral constraints: Some experimental evidence. Kyklos, 50(3), 297–324.CrossRefGoogle Scholar
  16. Brosio, G., Cassone, A., & Ricciuti, R. (2002). Tax evasion across Italy: Rational noncompliance or inadequate civic concern? Public Choice, 112, 259–273.CrossRefGoogle Scholar
  17. Cannari L., D’Alessio G., (2007). The Opinion of Italians on Tax Evasion. WP No. 618—Bank of Italy. Google Scholar
  18. Carbone E., Spigola A., (2015). Analisi Delle Direzioni Provinciali Attraverso Il DB Geo. Argomenti Di Discussione, Agenzia Delle Entrate, WP01/2015—Centro Studi Confindustria. Google Scholar
  19. Chung, J., & Trivedi, V. U. (2003). The effect of friendly persuasion and gender on tax compliance behavior. Journal of Business Ethics, 47(2), 133–145.CrossRefGoogle Scholar
  20. Clotfelter, C. T. (1983). Tax evasion and tax rates: An analysis of individual returns. The Review of Economics and Statistics, 65(3), 363–373.CrossRefGoogle Scholar
  21. Cummings, R. G., Martinez-Vazquez, J., & McKee, M. (2001). Cross cultural comparisons of tax compliance behavior. In International Center for Public Policy Working Paper Series, at AYSPS, GSU No. Paper 0103. Atlanta: International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.Google Scholar
  22. Cummings, R. G., Martinez-Vazquez, J., McKee, M., & Torgler, B. (2009). Tax morale affects tax compliance: Evidence from surveys and an artefactual field experiment. Journal of Economic Behavior & Organization, 70, 447–457.CrossRefGoogle Scholar
  23. D’Attoma, J. (2018). What explains the North-South divide in Italian tax compliance? An experimental analysis. Acta Politica. (Forthcoming).Google Scholar
  24. Feld, L. P., & Frey, B. S. (2002). Trust breeds trust: How taxpayers are treated. Economics of Governance, 3, 87–99.CrossRefGoogle Scholar
  25. Fischbacher, U., (2007). Z-Tree: Zurich Toolbox for Ready-Made Economic Experiments. Google Scholar
  26. Frey, B. S., & Torgler, B. (2007). Tax morale and conditional cooperation. Journal of Comparative Economics, 35(1), 136–159.CrossRefGoogle Scholar
  27. Gërxhani, K., & Schram, A. J. H. C. (2006). Tax evasion and income source: A comparative experimental study. Journal of Economic Psychology, 27(3), 402–422.CrossRefGoogle Scholar
  28. Hasseldine, J. (1999). Gender differences in tax compliance. Asia-Pacific Journal of Taxation, 3(2), 73–89.Google Scholar
  29. International Monetary Fund (2014). World Economic Outlook.Google Scholar
  30. Kaufmann, D., Kraay, A., Mastruzzi, M. (2009). Governance matters VIII: Aggregate and individual governance indicators 1996–2008. In Policy Research Working Paper Series 4978, The World Bank. Google Scholar
  31. Kirchgassner, G., & Pommerehne, W. W. (1996). Tax harmonization and tax competition in the European Union: Lessons from Switzerland. Journal of Public Economics, 60(3), 351–371.CrossRefGoogle Scholar
  32. Kirchler, E., & Maciejovsky, B. (2001). Tax compliance within the context of gain and loss situations, expected and current asset position, and profession. Journal of Economic Psychology, 22(2), 173–194.CrossRefGoogle Scholar
  33. Lago-Peñas, I., & Lago-Peñas, S. (2010). The determinants of tax morale in comparative perspective: Evidence from European countries. European Journal of Political Economy, 26(4), 441–453.CrossRefGoogle Scholar
  34. Lewis, A., Carrera, S., Cullis, J., & Jones, P. (2009). Individual, cognitive and cultural differences in tax compliance: UK and Italy compared. Journal of Economic Psychology, 30, 431–445.CrossRefGoogle Scholar
  35. Murphy, R. O., Ackermann, K. A., & Handgraaf, M. J. (2011). Measuring social value orientation. Judgement and Decision Making, 6(8), 771–781.Google Scholar
  36. Onu, D., & Oats, L. (2015). The role of social norms in tax compliance: theoretical overview and practical implications. Journal of Tax Administration, 1(1), 113–137.Google Scholar
  37. Papke, L. E., & Wooldridge, J. M. (2008). Panel data methods for fractional response variables with an application to test pass rates. Journal of Econometrics, 145, 121–133.CrossRefGoogle Scholar
  38. Pickhardt, M., & Prinz, A. (2014). Behavioral dynamics of tax evasion—A survey. Journal of Economic Psychology, 40, 1–19.CrossRefGoogle Scholar
  39. Poteete, A. R., Janssen, M. A., & Ostrom, E. (2010). Working Together: Collective Action, the Commons, and Multiple Methods in Practice. Princeton: Princeton University Press.CrossRefGoogle Scholar
  40. Russo, F. F. (2013). Tax morale and tax evasion reports. Economics Letters, 121, 110–114.CrossRefGoogle Scholar
  41. Santoro, A. (2010). L’evasione fiscal. Bologna: Il Mulino.Google Scholar
  42. Sinn, H.-W. (1990). Tax harmonization and tax competition in Europe. European Economic Review, 34(2–3), 489–504.CrossRefGoogle Scholar
  43. Slemrod, J. (2007). Cheating ourselves: The economics of tax evasion. Journal of Economic Perspectives., 21, 25–48.CrossRefGoogle Scholar
  44. Slemrod, J., & Weber, C. (2012). Evidence of the invisible: Toward a credibility revolution in the empirical analysis of tax evasion and the informal economy. International Tax and Public Finance, 19(1), 25–53.CrossRefGoogle Scholar
  45. Spicer, M., & Becker, L. A. (1980). Fiscal inequity and tax evasion: An experimental approach. National Tax Journal, 33(2), 171–175.Google Scholar
  46. Swedish Tax Agency Report (2014). The Development of the Tax Gap in Sweden 2007–12.Google Scholar
  47. OECD Tax and Development Report (2013).Google Scholar
  48. Tiebout, C. M. (1956). A pure theory of local expenditures. The Journal of Political Economy, 64(5), 416–424.CrossRefGoogle Scholar
  49. Torgler, B. (2002). Speaking to theorists and searching for facts: Tax morale and tax compliance in experiments. Journal of Economic Surveys, 16(5), 657–683.CrossRefGoogle Scholar
  50. Torgler, B. (2003). Tax morale, rule governed behavior and trust. Constitutional Political Economy, 14, 119–140.CrossRefGoogle Scholar
  51. Torgler, B. (2004). Tax morale, trust and corruption: Empirical evidence from transition countries Center for Research in Economics, Management and the Arts (CREMA). In Working Papers. Google Scholar
  52. Torgler, B. (2005a). Tax morale and direct democracy. European Journal of Political Economy, 21, 525–531.CrossRefGoogle Scholar
  53. Torgler, B. (2005b). Tax morale in Latin America. Public Choice, 122(1–2), 133–157.CrossRefGoogle Scholar
  54. Torgler, B. (2006). The importance of faith: Tax morale and religiosity. Journal of Economic Behavior & Organization, 61(1), 81–109.CrossRefGoogle Scholar
  55. Torgler, B., & Schaltegger, C. A. (2005). Tax amnesties and political participation. Public Finance Review, 33(3), 403–431.CrossRefGoogle Scholar
  56. Torgler, B., & Schneider, F. (2007). What shapes attitudes toward paying taxes? Evidence from multicultural European countries. Social Science Quarterly, 88(2), 443–470.CrossRefGoogle Scholar
  57. Traxler, C. (2010). Social norms and conditional cooperative taxpayers. European Journal of Political Economy, 26, 89–103.CrossRefGoogle Scholar
  58. Trivedi, U. V., Shehata, M., & Lynn, B. (2003). Impact of personal and situational factors on taxpayer compliance: An experimental analysis. Journal of Business Ethics, 47, 3.CrossRefGoogle Scholar
  59. Wenzel, M. (2004). An analysis of norm processes in tax compliance. Journal of Economic Psychology, 25, 213–228.CrossRefGoogle Scholar
  60. Wenzel, M. (2005). Misperceptions of social norms about tax compliance: From theory to intervention. Journal of Economic Psychology, 26, 862–883.CrossRefGoogle Scholar
  61. Zhang, N., Andrighetto, G., Ottone, S., Ponzano, F., & Steinmo, S. (2016). "Willing to pay?" Tax compliance in Britain and Italy: An experimental analysis. PLoS One, 11(2), e0150277.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Economics, Management and StatisticsUniversity of Milano-BicoccaMilanItaly
  2. 2.Department of Law, Politics, Economics and Social SciencesUniversity of Eastern PiedmontAlessandriaItaly
  3. 3.Department of Social and Political SciencesEuropean University InstituteFiesoleItaly

Personalised recommendations