(The World Bank Group in Washington, DC. Wikimedia Commons)

The following post was shared by Tiago Peixoto, Senior Public Sector Specialist in the Governance Global Practice at the World Bank:

“We have just published two new studies on the effect of citizen engagement on tax morale and tax compliance. In the first, published last month, we examine the Brazilian case, using data from all 5,570 municipalities in the country. We focus on two types of institutions that municipalities can voluntarily adopt to give citizens the opportunity to voice their preferences on policies and spending: public policy councils and participatory budgeting. Municipalities who adopt these practices collect significantly more local taxes. For instance, the adoption of participatory budgeting leads to the collection of up to 39% more tax revenues. Overall, the increase in municipal budgets is equivalent to roughly 40% of their capital investment spending.

But how context-dependent are these findings?

In the second study, published last week, we present results from the largest cross-country experiment ever conducted on tax morale. A unique online experiment, the study involved 65,000 individuals across 50 countries from all continents. Our results show that regardless of government systems, levels of development and culture, citizens are more committed to tax compliance when they: i) are able to voice their preferences about government spending, and ii) learn about government oversight of public resources.”

Voice and Punishment : A Global Survey Experiment on Tax Morale

Fredrik M. Sjoberg, Jonathan Mellon, Tiago C. Peixoto, Johannes Hemker and Lily L.Tsai

Abstract: An online survey experiment spanning 50 countries finds sizable improvements in tax morale when (a) the salience of anti-corruption efforts is increased and (b) citizens are allowed to voice their expenditure preferences to the government. These results hold very broadly across a uniquely large and diverse sample of respondents from all continents. The findings are consistent with theories emphasizing the role of democratic accountability, as well as of perceptions of legitimacy and “retributive justice,” in generating voluntary tax compliance. Implications and avenues for further research are discussed.