Tax morale and public spending inefficiency

Guglielmo Barone () and Sauro Mocetti

No 732, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Tax evasion is a widespread phenomenon and encouraging tax compliance is an important and much debated policy issue. Many studies have shown that tax cheating has to be attributed to a considerable extent to the tax morale of taxpayers. The aim of the present paper is to shed light on the relationship between the taxpayer and the public sector. Specifically, we investigate whether public spending inefficiency shapes individual tax morale. Combining data from Italian municipalities� balance sheets with individual data from a properly designed survey on tax morale, we find that the attitude towards paying taxes is better when resources are spent more efficiently. This does not appear to be due to some confounding factors at the municipality level or to spatial sorting of citizens. It is also robust to alternative measures of both inefficiency and tax morale.

Keywords: tax morale; public spending inefficiency (search for similar items in EconPapers)
JEL-codes: D24 H11 H26 H72 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Journal Article: Tax morale and public spending inefficiency (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_732_09

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