SCRUTINIZING TRUST IN AUTHORITIES AND POWER OF AUTHORITIES AS FACETS SHAPING THE MEDITERRANEAN TAX CLIMATE

• Published in: Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie 2014-06, Vol.1 (3), p.61-69
• Main Authors: LARISSA BǍTRÂNCEA, RAMONA-ANCA NICHITA, IOAN BǍTRÂNCEA
• Format: Article
• Language: English
• Subjects: Mediterranean interaction tax climate; power of authorities; tax behavior; trust in authorities
• ISSN: 1844-7007; 1844-7007

Tax literature acknowledges that trust in authorities and power of authorities, as grassroots dimensions of the “slippery slope framework”, influence compliance behavior. The present material assesses the framework’s main dimensions in the case of the Mediterranean tax climate (i.e., Cyprus, Greece, Italy, Portugal and Spain) by a manifold of economic, financial and psychological variables. The proposed rationale, including World Bank governance indicators (government effectiveness, rule of law, regulatory quality, control for corruption) as proxies for the framework’s dimensions, analyses of chain base indexes with respect to economic performance (calculations involving GDP per capita), quantitative evaluation of tax compliance burden and cost of taxation (calculations involving Paying Taxes reports), aims at raising awareness among policy makers and citizens about relevance of trust and power for compliance behavior within the Mediterranean tax climate. Multidisciplinary estimations of trust and power may constitute a benchmark for decision makers in appraising the effects generated by the measures countervailing crises and in designing strategies to hinder future undesirable economic bouts.