EconPapers    
Economics at your fingertips  
 

Cultural norms, the persistence of tax evasion, and economic growth

Dimitrios Varvarigos ()
Additional contact information
Dimitrios Varvarigos: University of Leicester

Economic Theory, 2017, vol. 63, issue 4, 961-995

Abstract: Abstract I study the effects of tax evasion on economic growth by focusing on the cultural aspects of tax compliance and their effect on the extensive margin of tax evasion. A cultural norm that determines the contemptibility of tax dodging practices links the past incidence of tax evasion with the tax payers’ current incentives to conceal sources of income. This dynamic complementarity may lead to multiple equilibria in the evolution of tax evasion. Due to the latter’s effect on capital accumulation, this multiplicity may lead economies in divergent development paths, as long as they differ in the initial magnitude of tax evasion. This happens even though economies may be, on the outset, identical in terms of capital stock and structural characteristics, including those that govern tax enforcement.

Keywords: Tax evasion; Cultural norms; Fiscal policy; Economic growth (search for similar items in EconPapers)
JEL-codes: E62 H26 O41 Z10 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s00199-016-0976-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:63:y:2017:i:4:d:10.1007_s00199-016-0976-1

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-04-09
Handle: RePEc:spr:joecth:v:63:y:2017:i:4:d:10.1007_s00199-016-0976-1