A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina
We present new evidence that a non-threatening behavioral intervention appealing to reciprocity significantly increases tax compliance in a setting (i.e., crisis-ridden Argentina) where one might least expect such an intervention to succeed. Prior research offers many examples of the efficacy of more threatening deterrence approaches. In contrast, field experimental evidence for non-deterrence nudges such as those appealing to taxpayers feelings of reciprocity (“fiscal exchange”) has been limited. This paper reports evidence from a randomized controlled trial with over 20,000 taxpayers in Argentina. A redesigned tax bill with fiscal exchange appeal increased payment rates of tax delinquents by about 20 percent, or almost 40 percent when the bills were delivered in person. With the fiscal exchange appeal, the new bill design elicited significantly more payments than without. The unfavorable economic crisis context in Argentina makes the impacts remarkable. We hypothesize that having children as beneficiaries, the visual form of the appeal, and the proximity between taxpayers and public services in the municipal setting have contributed to the positive compliance impacts.
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Language: | English |
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Inter-American Development Bank
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Subjects: | Fiscal Management, Randomized Controlled Trial, Public Finance, Tax Compliance, Taxpayer, Public Good, Public Service, Property Tax, C93 - Field Experiments, H26 - Tax Evasion and Avoidance, D91 - Intertemporal Household Choice • Life Cycle Models and Saving, H71 - State and Local Taxation Subsidies and Revenue, D30 - Distribution: General, H31 - Household, Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance, |
Online Access: | http://dx.doi.org/10.18235/0002609 https://publications.iadb.org/en/a-playground-for-tax-compliance-testing-fiscal-exchange-in-an-rct-in-argentina |
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dig-bid-node-286962020-11-11T15:43:20ZA Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina 2020-08-26T00:00:00+0000 http://dx.doi.org/10.18235/0002609 https://publications.iadb.org/en/a-playground-for-tax-compliance-testing-fiscal-exchange-in-an-rct-in-argentina Inter-American Development Bank Fiscal Management Randomized Controlled Trial Public Finance Tax Compliance Taxpayer Public Good Public Service Property Tax C93 - Field Experiments H26 - Tax Evasion and Avoidance D91 - Intertemporal Household Choice • Life Cycle Models and Saving H71 - State and Local Taxation Subsidies and Revenue D30 - Distribution: General H31 - Household Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance We present new evidence that a non-threatening behavioral intervention appealing to reciprocity significantly increases tax compliance in a setting (i.e., crisis-ridden Argentina) where one might least expect such an intervention to succeed. Prior research offers many examples of the efficacy of more threatening deterrence approaches. In contrast, field experimental evidence for non-deterrence nudges such as those appealing to taxpayers feelings of reciprocity (“fiscal exchange”) has been limited. This paper reports evidence from a randomized controlled trial with over 20,000 taxpayers in Argentina. A redesigned tax bill with fiscal exchange appeal increased payment rates of tax delinquents by about 20 percent, or almost 40 percent when the bills were delivered in person. With the fiscal exchange appeal, the new bill design elicited significantly more payments than without. The unfavorable economic crisis context in Argentina makes the impacts remarkable. We hypothesize that having children as beneficiaries, the visual form of the appeal, and the proximity between taxpayers and public services in the municipal setting have contributed to the positive compliance impacts. Inter-American Development Bank Huáscar Eguino Simeon Schächtele application/pdf IDB Publications Argentina en |
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Fiscal Management Randomized Controlled Trial Public Finance Tax Compliance Taxpayer Public Good Public Service Property Tax C93 - Field Experiments H26 - Tax Evasion and Avoidance D91 - Intertemporal Household Choice • Life Cycle Models and Saving H71 - State and Local Taxation Subsidies and Revenue D30 - Distribution: General H31 - Household Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance Fiscal Management Randomized Controlled Trial Public Finance Tax Compliance Taxpayer Public Good Public Service Property Tax C93 - Field Experiments H26 - Tax Evasion and Avoidance D91 - Intertemporal Household Choice • Life Cycle Models and Saving H71 - State and Local Taxation Subsidies and Revenue D30 - Distribution: General H31 - Household Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance |
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Fiscal Management Randomized Controlled Trial Public Finance Tax Compliance Taxpayer Public Good Public Service Property Tax C93 - Field Experiments H26 - Tax Evasion and Avoidance D91 - Intertemporal Household Choice • Life Cycle Models and Saving H71 - State and Local Taxation Subsidies and Revenue D30 - Distribution: General H31 - Household Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance Fiscal Management Randomized Controlled Trial Public Finance Tax Compliance Taxpayer Public Good Public Service Property Tax C93 - Field Experiments H26 - Tax Evasion and Avoidance D91 - Intertemporal Household Choice • Life Cycle Models and Saving H71 - State and Local Taxation Subsidies and Revenue D30 - Distribution: General H31 - Household Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance Inter-American Development Bank A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina |
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We present new evidence that a non-threatening behavioral intervention appealing to reciprocity significantly increases tax compliance in a setting (i.e., crisis-ridden Argentina) where one might least expect such an intervention to succeed. Prior research offers many examples of the efficacy of more threatening deterrence approaches. In contrast, field experimental evidence for non-deterrence nudges such as those appealing to taxpayers feelings of reciprocity (“fiscal exchange”) has been limited. This paper reports evidence from a randomized controlled trial with over 20,000 taxpayers in Argentina. A redesigned tax bill with fiscal exchange appeal increased payment rates of tax delinquents by about 20 percent, or almost 40 percent when the bills were delivered in person. With the fiscal exchange appeal, the new bill design elicited significantly more payments than without. The unfavorable economic crisis context in Argentina makes the impacts remarkable. We hypothesize that having children as beneficiaries, the visual form of the appeal, and the proximity between taxpayers and public services in the municipal setting have contributed to the positive compliance impacts. |
author2 |
Huáscar Eguino |
author_facet |
Huáscar Eguino Inter-American Development Bank |
topic_facet |
Fiscal Management Randomized Controlled Trial Public Finance Tax Compliance Taxpayer Public Good Public Service Property Tax C93 - Field Experiments H26 - Tax Evasion and Avoidance D91 - Intertemporal Household Choice • Life Cycle Models and Saving H71 - State and Local Taxation Subsidies and Revenue D30 - Distribution: General H31 - Household Argentina;Field experiment;Tax compliance;fiscal exchange;nudge;randomizedcontrolled trial;local public finance |
author |
Inter-American Development Bank |
author_sort |
Inter-American Development Bank |
title |
A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina |
title_short |
A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina |
title_full |
A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina |
title_fullStr |
A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina |
title_full_unstemmed |
A Playground for Tax Compliance?: Testing Fiscal Exchange in an RCT in Argentina |
title_sort |
playground for tax compliance?: testing fiscal exchange in an rct in argentina |
publisher |
Inter-American Development Bank |
url |
http://dx.doi.org/10.18235/0002609 https://publications.iadb.org/en/a-playground-for-tax-compliance-testing-fiscal-exchange-in-an-rct-in-argentina |
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AT interamericandevelopmentbank aplaygroundfortaxcompliancetestingfiscalexchangeinanrctinargentina AT interamericandevelopmentbank playgroundfortaxcompliancetestingfiscalexchangeinanrctinargentina |
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