Wednesday, May 5, 2021
Alice Guerra (Bologna, Google Scholar) & Brooke Harrington (Dartmouth, Google Scholar), Regional Variation in Tax Compliance and the Role of Culture:
To address a debate in the literature concerning the impact of culture on tax compliance, we examine a case where extreme disparities in the two variables coincide, and test for a causal relationship. Our research design isolates the role of culture by focusing on regional differences within a single country: Italy. Southern Italy has long been a focus of research interest, not only for its extremely high rates of tax evasion, but for a host of other social and political ills, all usually attributed to regional culture.
However, our laboratory tax compliance experiment, conducted in representative provinces of the northern and southern regions, found no significant differences; taxpayers in the north and south behaved alike, both in terms of average compliance rates and individuals’ responsiveness to treatments.