Norms, Enforcement, and Tax Evasion

Author
Timothy Besley, Anders Jensen, Torsten Persson
Content Type
Working Paper
Institution
The John F. Kennedy School of Government at Harvard University
Abstract
This paper studies individual and social motives in tax evasion. We build a simple dynamic model that incorporates these motives and their interaction. The social motives underpin the role of norms and is the source of the dynamics that we study. Our empirical analysis exploits the adoption in 1990 of a poll tax to fund local government in the UK, which led to widespread evasion. The evidence is consistent with the model’s main predictions on the dynamics of evasion.
Topic
Political Economy, Economy, Financial Crimes, Tax Systems
Political Geography
United Kingdom, Europe, Global Focus