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

Dwenger, Nadja, Kleven, Henrik, Rasul, Imran and Rincke, Johannes (2016) Extrinsic and intrinsic motivations for tax compliance: evidence from a field experiment in Germany. American Economic Journal: Economic Policy, 8 (3). pp. 203-232. ISSN 1945-7731

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Identification Number: 10.1257/pol.20150083

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.

Item Type: Article
Official URL: https://www.aeaweb.org/journals/pol
Additional Information: © 2016 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HJ Public Finance
JEL classification: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 14 Apr 2016 11:13
Last Modified: 20 Mar 2019 02:56
URI: http://eprints.lse.ac.uk/id/eprint/66118

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