Portal de Periódicos da CAPES

Local autonomy, tax morale, and the shadow economy

2009; Springer Science+Business Media; Volume: 144; Issue: 1-2 Linguagem: Inglês

10.1007/s11127-009-9520-1

1573-7101

Benno Torgler, Friedrich Schneider, Christoph A. Schaltegger,

Fiscal Policy and Economic Growth

Policymakers often propose strict enforcement strategies to fight the shadow economy and to increase tax morale. However, there is an alternative bottom-up approach that decentralises political power to those who are close to the problems. This paper analyses the relationship with local autonomy. We use data on tax morale at the individual level and macro data on the size of the shadow economy to analyse the relevance of local autonomy and compliance in Switzerland. The findings suggest that there is a positive (negative) relationship between local autonomy and tax morale (size of the shadow economy).