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Extrinsic and intrinsic motivations for tax compliance: evidence from a field experiment in Germany

Nadja Dwenger, Henrik Kleven, Imran Rasul () and Johannes Rincke ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study extrinsic and intrinsic motivations for tax compliance in the context of a local church tax in Germany. This tax system has historically relied on zero deterrence so that any compliance at baseline is intrinsically motivated. Starting from this zero deterrence baseline, we implement a field experiment that incentivized compliance through deterrence or rewards. Using administrative records of taxes paid and true tax liabilities, we use these treatments to document that intrinsically motivated compliance is substantial, that a significant fraction of it may be driven by duty-to-comply preferences, and that there is no crowd-out between extrinsic and intrinsic motivations.

Keywords: tax compliance; intrinsic motivation; extrinsic motivation; filed experiment (search for similar items in EconPapers)
JEL-codes: C93 H26 (search for similar items in EconPapers)
Date: 2016-08-01
New Economics Papers: this item is included in nep-exp, nep-iue, nep-pbe and nep-pub
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Published in American Economic Journal: Economic Policy, 1, August, 2016, 8(3), pp. 203-232. ISSN: 1945-7731

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Journal Article: Extrinsic and Intrinsic Motivations for Tax Compliance: Evidence from a Field Experiment in Germany (2016) Downloads
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