The effect of knowing how tax money is spent and the distance with tax revenue's potential beneficiaries on tax compliance

Paula Arzadun, Ronald Mora-Esquivel, Martín Solís


The research questions this study addresses are Would the knowledge taxpayers have about tax money use make a difference in their willingness to comply with taxes? Would a sense of non-geographical distance with tax revenue's potential beneficiaries be effective in reducing tax evasion?; Do tax usage knowledge and geographical distance influence tax compliance indirectly through having a preference for the way the taxes are invested ?; Do tax usage knowledge and geographic distance moderate the effect of a tax rate increment on tax compliance? This study reports on the results of two experimental designs. The first one was a random unrestricted experiment with 175 professionals enrolled in a Business Management Mastering Program. They were situated in a white-collar worker's scenario, where they had to make one decision related to their willingness to comply with taxes. A second experimental game was carried out, with 168 undergraduate students enrolled in different engineering and business management bachelor programs. The results indicate that tax usage knowledge and non-geographical distance influence tax compliance indirectly.


Tax compliance; Tax usage; Social distance; Tax recipient

Full Text:



Abbiati, L., Antinyan, A., & Corazzini, L. (2014). Are taxes beautiful? A survey experiment on information, tax choice and perceived adequacy of the tax burden. IWQW Discussion Papers, No. 02/2014, Friedrich-Alexander-Universitat Earlangen-Numberg, Institut for Wirtschaftspolitik und Quantative Wirtschaftsforsching (IWQW), Nurnberg, 1-13.

Ali, M., Odd-Hedge, F. & Hoem Sjursen, I. (2014) To Pay or Not to Pay? Citizens’ Attitudes Toward Taxation in Kenya, Tanzania, Uganda, and South Africa. World development, 64, 828-842.

Alm, J. (2012) Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies. International Tax and Public Finance, 19(1), 54-77.

Alm, J., Bloomquist, K. M., & McKee, M. (2015). On the external validity of laboratory tax compliance experiments. Economic Inquiry, 53(2), 1170-1186.

Alm, J., & Torgler, B. (2006). Culture differences and tax morale in the United States and in Europe. Journal of economic psychology, 27(2), 224-246.

Alm, J., Jackson, B. R., & McKee, M. (1993) Estimating the determinants of taxpayer compliance with experimental data. National Tax Journal, 107-114.

Alm, J., Sanchez, I. & De Juan, A. (1995) Economic and noneconomic factors in tax compliance. KYKLOS, 48, 3-18.

Alm, J. (2019). What motivates tax compliance? Tulane Economics Working Paper Series. Working Paper 1903, April, 1-65.

Alm, J., Kirchler, E., Muehlbacher, S., Gangl, K., Hofmann, E., Kogler, C., & Pollai, M. (2012). Rethinking the research paradigms for analysing tax compliance behavior, CESifo Forum, ISSN 2190-717X, info Institut-Leibniz-Institut für Wirtschaftsforschung an der Universität München, 13(2), pp. 33-40).

Andreoni, J., & Vesterlund, L. (2001). Which is the fair sex? Gender differences in altruism. The Quarterly Journal of Economics, 116(1), 293-312.

Andreoni, J., Erard, B., & Feinstein, J. (1998). Tax compliance. Journal of economic literature, 36(2), 818-860.

Andrighetto, G., Zhang, N., Ottone, S., Ponzano, F., D'Attoma, J., & Steinmo, S. (2016). Are some countries more honest than others? Evidence from a tax compliance experiment in Sweden and Italy. Frontiers in psychology, 7, 472.

Ariel, B. (2012). Deterrence and moral persuasion effects on corporate tax compliance: findings from a randomized controlled trial. Criminology, 50(1), 27-69.

Casal, S., Kogler, C., Mittone, L. & Kircher, E. (2016) Tax compliance depends on voice of taxpayers. Journal of Economic Psychology, 56, 141-150.

Charness, G., & Villeval, M. C. (2009). Cooperation and competition in intergenerational experiments in the field and the laboratory. American Economic Review, 99(3), 956-78.

Cryder, C. E., Loewenstein, G., & Scheines, R. (2013). The donor is in the details. Organizational Behavior and Human Decision Processes, 120(1), 15-23.

Danielson, A. J., & Holm, H. J. (2007). Do you trust your brethren?: Eliciting trust attitudes and trust behavior in a Tanzanian congregation. Journal of Economic Behavior & Organization, 62(2), 255-271.

DellaVigna, S., List, J. A., & Malmendier, U. (2012). Testing for altruism and social pressure in charitable giving. The quarterly journal of economics, 127(1), 1-56.

Doerrenberg, P. (2015). Does the use of tax revenue matter for tax compliance behavior?. Economics Letters, 128, 30-34.

Dunn, E. W., Aknin, L. B., & Norton, M. I. (2008). Spending money on others promotes happiness. Science, 319(5870), 1687-1688.

Ein-Gar, D., & Levontin, L. (2013). Giving from a distance: Putting the charitable organization at the center of the donation appeal. Journal of Consumer Psychology, 23(2), 197-211.

Fischer, C. M., Wartick, M., & Mark, M. M. (1992). Detection probability and taxpayer compliance: A review of the literature. Journal of Accounting Literature, 11, 1.

Fjeldstad, O.-H., Schulz-Herzenberg, C., & Sjursen, I.H. (2012) People’s views of taxation in Africa: a review of research on determinants of tax compliance. Working Paper 8, International Centre for Taxation and Development.

Fochmann, M., & Kroll, E. B. (2016). The effects of rewards on tax compliance decisions. Journal of Economic Psychology, 52, 38-55.

Frey, B. S., & Torgler, B. (2007). Tax morale and conditional cooperation. Journal of comparative economics, 35(1), 136-159.

Güemes, C. (2016). “Confianza”, EUNOMÍA. Revista en Cultura de la Legalidad, 132-143.

Güth, W., & Kirchkamp, O. (2012). Will you accept without knowing what? The Yes-No game in the newspaper and in the lab. Experimental Economics, 15(4), 656-666.

Güth, W., Schmidt, C., & Sutter, M. (2007). Bargaining outside the lab–a newspaper experiment of a three‐person ultimatum game. The Economic Journal, 117(518), 449-469.

Hallsworth, M. (2014). The use of field experiments to increase tax compliance. Oxford Review of Economic Policy, 30(4), 658-679.

Haslam, S. A., & McGarty, C. (2004). Experimental design and causality in social psychological research. The Sage handbook of methods in social psychology, 237-264.

Hofmann, E., Hoelzl, E., & Kirchler, E. (2008) “Preconditions of voluntary tax compliance: Knowledge and evaluation of taxation, norms, fairness, and motivation to cooperate”. Zeitschrift für Psychologie/Journal of Psychology, 216(4), 209-217.

Holler, M., Hoelzl, E., Kirchler, E., Leder, S., & Mannetti, L. (2008). Framing of information on the use of public finances, regulatory fit of recipients and tax compliance. Journal of Economic Psychology, 29(4), 597-611.

Jackson, B. R., & Milliron, V. C. (1986). Tax compliance research: Findings, problems, and prospects. Journal of accounting literature, 5(1), 125-165.

Jimenez, P., & Iyer, G. S. (2016). Tax compliance in a social setting: The influence of social norms, trust in government, and perceived fairness on taxpayer compliance. Advances in accounting, 34, 17-26.

Jones, B., & Rachlin, H. (2006). Social discounting. Psychological science, 17(4), 283-286.

Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary tax compliance: The “slippery slope” framework. Journal of Economic psychology, 29(2), 210-225.

Kirchler, E., Muehlbacher, S., Kastlunger, B., & Wahl, I. (2007). “Why pay taxes? A review of tax compliance decisions”. Working paper 07-30. Andrew Young School of Policy Studies, Georgia State University. December, p.1-27.

Kogut, T., & Ritov, I. (2005). The “identified victim” effect: An identified group, or just a single individual?. Journal of Behavioral Decision Making, 18(3), 157-167.

Lamberton, P. H., Kabatereine, N. B., Oguttu, D. W., Fenwick, A., & Webster, J. P. (2014). Sensitivity and specificity of multiple Kato-Katz thick smears and a circulating cathodic antigen test for Schistosoma mansoni diagnosis pre-and post-repeated-praziquantel treatment. PLoS neglected tropical diseases, 8(9).

Lewis, A., Carrera, S., Cullis, J., & Jones, P. (2009). “Individual, cognitive and cultural differences in tax compliance: UK and Italy compared”. Journal of Economic Psychology, 30(3), 431-445.

Li, S. X., Eckel, C. C., Grossman, P. J., & Brown, T. L. (2011). Giving to government: Voluntary taxation in the lab. Journal of Public Economics, 95(9-10), 1190-1201.

Luttmer, E. F., & Singhal, M. (2014). Tax morale. Journal of economic perspectives, 28(4), 149-68.

Meer, J. (2014). Effects of the price of charitable giving: Evidence from an online crowdfunding platform. Journal of Economic Behavior & Organization, 103, 113-124.

Naser, A., Ramírez-Alujas, A. & Rosales, D. (2017) Confianza y gobierno abierto en América Latina. Desde el gobierno abierto al Estado abierto en América Latina y el Caribe. Santiago: CEPAL, 2017. LC/PUB. 2017/9-P. p. 253-282.

Pampel, F., Andrighetto, G., & Steinmo, S. (2019). How institutions and attitudes shape tax compliance: a cross-national experiment and survey. Social Forces, 97(3), 1337-1364.

Richardson, G. (2006). Determinants of tax evasion: A cross-country investigation Auditing and Taxation. Journal of International Accounting, Auditing and Taxation, 15(2), 150-169.

Richardson, M., & Sawyer, A. J. (2001). A taxonomy of the tax compliance literature: further findings, problems and prospects. Austl. Tax F., 16, 137.

Rooney, P., & Frederick, H. K. (2007). Paying for overhead: A study of the impact of foundations' overhead payment policies on educational and human service organizations.

Small, D. A. (2011). Reducing Social Distance to Boost Charitable Contributions. The science of giving: Experimental approaches to the study of charity.

Snijders, T. A., & Bosker, R. J. (1999). Multilevel analysis: An introduction to basic and advanced multilevel modeling. London: Sage.

Sussman, A. B., & Olivola, C. Y. (2011). Axe the tax: Taxes are disliked more than equivalent costs. Journal of Marketing Research, 48(SPL), S91-S101.

Torgler, B. (2003). Beyond punishment: A tax compliance experiment with taxpayers in Costa Rica. Revista de Análisis Económico, 18(1), 27-56.

Torgler, B. (2005). “Tax morale and direct democracy”. European Journal of Political economy, 21(2), 525-531.

Walsh, K. (2012). Understanding taxpayer behaviour–new opportunities for tax administration. The Economic and Social Review, 43(3, Autumn), 451-475.


  • There are currently no refbacks.

Catalogs and Indexes:


Plagiarism analysis by: