Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania and Russia

► Cross-cultural testing of the slippery slope framework. ► Confirmation of influence of trust and power on tax compliance. ► Dynamic effects of trust on power and vice versa. ► Identification of tax-relevant cultural differences. The slippery slope framework of tax compliance integrates different d...

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Bibliographic Details
Published in:Journal of economic psychology 2013-02, Vol.34 (1), p.169-180
Main Authors: Kogler, Christoph, Batrancea, Larissa, Nichita, Anca, Pantya, Jozsef, Belianin, Alexis, Kirchler, Erich
Format: Article
Language:English
Subjects:
Compliance
Cross-cultural
Determinants
Eastern Europe
Economic psychology
Legislation
Power
Russian Federation
Slippery slope framework
Studies
Tax compliance
Tax evasion
Tax legislation
Taxation
Trust
Western Europe
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Summary:► Cross-cultural testing of the slippery slope framework. ► Confirmation of influence of trust and power on tax compliance. ► Dynamic effects of trust on power and vice versa. ► Identification of tax-relevant cultural differences. The slippery slope framework of tax compliance integrates different determinants of tax compliance and assigns them to one of two major dimensions. Accordingly, tax compliance depends on the factors perceived trust in the authorities and perceived power of the authorities, but trust on the one hand fosters voluntary compliance whereas power on the other hand leads to enforced compliance. The present study tested these main assumptions of the slippery slope framework in four European countries differing in terms of cultural and economic settings (Austria, Hungary, Romania and Russia) by presenting participants with different scenarios of trust and power. As predicted, the highest level of intended tax compliance and the lowest level of tax evasion were found in conditions of high trust and high power. In addition, participants in conditions of high trust indicate more voluntary compliance just as participants in conditions of high power indicate higher enforced compliance. The present results support the assumptions of the slippery slope framework and confirm the role of trust and power as important determinants of tax compliance.
ISSN:0167-4870
1872-7719
DOI:10.1016/j.joep.2012.09.010