Akademik Veri Yönetim Sistemi
35th International Public Finance Conference, Antalya, Türkiye, 14 Ekim - 17 Kasım 2021, ss.360-365
The influence of social norms on tax compliance has been the integral
part of the taxation literature for years. In this context, this study revisits
the nexus between democracy and tax compliance for a sample of 58 countries.
The study substantially differs from others with respect to the democracy
indicators and the methodology employed in its empirical analyses. That is,
while investigating the role of democracy on cross-country differences in tax
morality four different quantitative measures of democracy are appropriated to
justify the robustness of findings. Moreover, the analysis is based on the
detection of a threshold that differentiates the asymmetric effects of weak and
strong democratic norms in explaining the country-specific tax moralities,
rather than searching solely for the presence of a relationship between
democracy and tax morality. The threshold analysis in this study is carried out
by Hansen’s threshold regression approach. Tax morality is proxied by country
scores calculated by the individual responses given in the sixth wave of the
World Values Survey. Implications of our findings on democracy-led tax morality
are two-fold. One, tax morality is significantly lower in countries with below-threshold
democracy than those with above-threshold democracy. Two, the contribution of
democracy to tax morality is more in below-threshold democracies than in
above-threshold democracies. Altogether, these two implications point out the fact
that democratization improves morality of the taxpayers especially in countries
which have plenty of scope for improving democracy.