Crisis Narratives and Judicial Enforcement: Evidence from the Greek Fiscal Crisis

Alessandra Forestra, Rigissa Megalokonomou () and Michael Vlassopoulos
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Alessandra Forestra: Southampton University
Rigissa Megalokonomou: Monash University
Michael Vlassopoulos: Southampton University

No 18489, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper investigates whether crisis narratives affect how the judiciary handles tax evasion. We study this question in the context of the Greek debt crisis, in which tax evasion was publicly blamed for the fiscal collapse, and judges themselves experienced substantial salary cuts as part of the resulting austerity programme. Using a novel dataset compiled from Greek Supreme Court rulings between 2006 and 2014, we compare tax evasion appeals with appeals in other serious crimes not directly related to the fiscal crisis, such as homicide and rape, in a difference-in-differences framework. We find that the probability that the Supreme Court rejects tax-evasion appeals increases by about 25 percentage points relative to these control offences after January 2010—about a 43% increase relative to the pre-crisis baseline. Effects are larger in months with greater public attention to tax evasion, as measured by Google Trends, suggesting a role for salience. Our findings suggest that crisis narratives, par- ticularly when coupled with personal economic shocks to judges, can influence the judicial treatment of tax offences.

Keywords: economic narratives; judicial decision-making; tax evasion; financial crisis; legal institutions; difference- in-differences (search for similar items in EconPapers)
JEL-codes: D91 H26 K40 K42 P16 Z13 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-iue, nep-law and nep-pbe
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