Kristina Maria Persson writes about the effects of moral appeals on tax compliance in Harvard Business Review
Our colleague Kristina Maria Persson (née Bott), together with her co-writers at the Norwegian Business School in Bergen, has written an article in Harvard Business Review about how moral appeals can reduce tax evasion. «Moral appeals can help reduce tax evasion» is a summary of the article «You’ve got mail – a randomised field experiment in tax evasion», which forms part of Kristina Maria Persson’s (Bott’s) PhD dissertation in Economics. Three professors at the Norwegian School of Economics, Alexander W. Cappelen, Erik Ø. Sørensen and Bertil Tungodden and Persson conducted a large-scale field experiment in collaboration with the Norwegian Tax Administration. The goal of the experiment was to study alternative motivations underlying tax evasion.
The authors find that moral appeals play an important role in tax compliance, but that they need to be applied carefully. Moral appeals are not universal in reach, and work best in the moment without longer-lasting effects. By coupling moral appeals with other measures like the threat of detection, decision-makers can better ensure compliance, including limiting tax evasion.
This insight is important both for policymakers thinking about tax avoidance but also more broadly. The findings suggest that moral appeals should be part of the toolkit for any organization in which compliance is an important challenge.
Persson is an Economist at Oslo Economics, and a PhD student at the research groups Choice Lab (experimental and behavioural economics) and CELE (empirical labour economics) at the Norwegian School of Economics. She will defend her dissertation in August this year.