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Reciprocity and Willingness to Pay Taxes: Evidence from a Survey Experiment in Latin America

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  • Daniel Ortega
  • Lucas Ronconi
  • Pablo Sanguinetti
Abstract
Are citizens more willing to pay taxes when the government’s performance improves? We review the tax morale literature, disentangling its different components, and provide empirical evidence exploiting a novel survey conducted in seventeen Latin American cities and an experi- mental attempt at measuring reciprocity in tax collection in developing countries. The evidence suggests that governments interested in increasing tax revenues should not focus solely on esca- lating the coercive power of the state (that is, more audits and nes). Rather, providing better public services to society can be an effective (albeit limited) tool to raise revenues.

Suggested Citation

  • Daniel Ortega & Lucas Ronconi & Pablo Sanguinetti, 2016. "Reciprocity and Willingness to Pay Taxes: Evidence from a Survey Experiment in Latin America," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 55-87, April.
    • Handle: RePEc:col:000425:014410
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    References listed on IDEAS

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    1. Henrik Jacobsen Kleven & Martin B. Knudsen & Claus Thustrup Kreiner & Søren Pedersen & Emmanuel Saez, 2011. "Unwilling or Unable to Cheat? Evidence From a Tax Audit Experiment in Denmark," Econometrica, Econometric Society, vol. 79(3), pages 651-692, May.
    2. Hallsworth, Michael & List, John A. & Metcalfe, Robert D. & Vlaev, Ivo, 2017. "The behavioralist as tax collector: Using natural field experiments to enhance tax compliance," Journal of Public Economics, Elsevier, vol. 148(C), pages 14-31.
    3. Paul Carrillo & Dina Pomeranz & Monica Singhal, 2017. "Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 144-164, April.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.
    2. Simeon Schächtele & Huáscar Eguino & Soraya Roman, 2023. "Fiscal Exchange and Tax Compliance: Evidence From a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(3), pages 796-814, June.
    3. Santoro, Fabrizio & Mascagni, Giulia, 2023. "Visual nudges: How deterrence and equity shape tax attitudes and behaviour in Rwanda," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    4. De la O, Ana & Rossel, Cecilia & Manzi, Pilar, 2023. "Opting Out from Public Services and the Social Contract in Latin America," IDB Publications (Working Papers) 13285, Inter-American Development Bank.
    5. José Ignacio Giménez-Nadal & Lucía Echeverría & Alberto Molina, 2023. "Citizen security and urban commuting in Latin America," Urban Studies, Urban Studies Journal Limited, vol. 60(13), pages 2585-2611, October.
    6. Ardanaz, Martín & Corbacho, Ana & Ruiz-Vega, Mauricio, 2014. "Mind the Gap: Bridging the Perception and Reality of Crime Rates with Information," IDB Publications (Working Papers) 6595, Inter-American Development Bank.
    7. Mohammed Aminu Yaru, 2022. "Budget transparency and internal revenue mobilisation at sub-national government level: evidence from Nigeria," Public Sector Economics, Institute of Public Finance, vol. 46(4), pages 505-531.
    8. Castro, Lucio & Scartascini, Carlos, 2015. "Tax compliance and enforcement in the pampas evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 65-82.
    9. Martín Ardanaz & Ana Corbacho & Mauricio Ruiz-Vega, 2014. "Mind the Gap: Bridging the Perception and Reality of Crime Rates with Information," IDB Publications (Working Papers) 86138, Inter-American Development Bank.
    10. Anne Brockmeyer & Francisco Garfias & Juan Carlos Suárez Serrato, 2024. "The Fiscal Contract up Close: Experimental Evidence from Mexico City," CESifo Working Paper Series 11270, CESifo.
    11. De La O, Ana & Rossel, Cecilia & Manzi, Pilar, 2023. "Opting out from public services and the social contract in Latin America," LSE Research Online Documents on Economics 121025, London School of Economics and Political Science, LSE Library.
    12. Towfiqul Islam Khan & Muntaseer Kamal & Faiyaz Talukdar, 2019. "Potential of Personal Income Tax in Bangladesh: An Examination of Survey Data," CPD Working Paper 126, Centre for Policy Dialogue (CPD).
    13. Blesse, Sebastian, 2023. "Do your tax problems make tax evasion seem more justifiable? Evidence from a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    14. Blesse, Sebastian, 2021. "Are your tax problems an opportunity not to pay taxes? Evidence from a randomized survey experiment," ZEW Discussion Papers 21-040, ZEW - Leibniz Centre for European Economic Research.
    15. Juan Felipe García & Daniel Mejia & Daniel Ortega, 2013. "Police Reform, Training and Crime: Experimental evidence from Colombia´s Plan Cuadrantes," Documentos CEDE 10497, Universidad de los Andes, Facultad de Economía, CEDE.
    16. Krakowski, Krzysztof & Ronconi, Lucas, 2023. "Compliance and Accountability: Evidence from a Field Experiment in Argentina," IDB Publications (Working Papers) 12930, Inter-American Development Bank.
    17. Raúl López-Pérez & Aldo Ramírez-Almudio, 2020. "Why people give to their governments: The role of outcome-oriented norms," Working Papers 2007, Instituto de Políticas y Bienes Públicos (IPP), CSIC.
    18. López Pérez, Raúl & Ramírez Zamudio, Aldo., 2018. "Social norms and tax compliance: Experiments and theory," Working Papers in Economic Theory 2018/02, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    19. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.

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    More about this item

    Keywords

    Taxes; Evasion; Tax morale; Reciprocity;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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