Building versus maintaining a perceived confidence-based tax climate: Experimental evidence

Journal of Economic Psychology, vol. 81, pp. 102310

Abstract

A confidence-based climate between public administrations and citizens is essential. This paper argues and provides empirical evidence that depending on the perceived interaction history, different policies are needed to build versus maintain confidence. Applying the extended Slippery Slope Framework of tax compliance, an online and a laboratory experiment were conducted to explore whether tax authorities’ coercive and legitimate power have different effects depending on whether they are situated in an antagonism-based or confidence-based climate. Results showed that in an antagonism-based interaction climate, a combination of high coercive and high legitimate power changed the climate into a confidence-based interaction climate. In contrast, in a confidence-based climate the same power combination did not maintain but erode the climate. Results also suggest that confidence-based climates are maintained by low coercive power combined with high legitimate power. The paper concludes that interaction climates operate as psychological frames which guide how policy instruments affect taxpayers’ trust in the tax authorities.

Authors 4

1. Katharina Gangl corresponding

   University of Vienna · Institut für Höhere Studien - Institute for Advanced Studies (IHS)

   Affiliation as printed

   Institute for Advanced Studies, Austria

   University of Vienna, Austria

2. WILCO W. VAN DIJK Aachen

   Leiden University

   Affiliation as printed

   Leiden University, the Netherlands

3. Eric van Dijk Aachen

   Leiden University

   Affiliation as printed

   Leiden University, the Netherlands

4. Eva B. Hofmann

   Vienna University of Economics and Business

   Affiliation as printed

   WU Vienna, Austria