Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/190061 
Year of Publication: 
2018
Series/Report no.: 
WIDER Working Paper No. 2018/12
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
Our paper investigates the implications of asymmetric non-tax revenue information for tax morale using micro data from thirty-six African countries. We utilize a model in which agents form their perceptions about the sufficiency of government non-tax revenue for development financing under asymmetric information conditions. We then construct a composite index of information access that generates predictions about these perceptions and tax morale at the household level. Two important predictions emerge: (i) in the presence of asymmetric information, households overestimate the ability of non-tax revenues alone to finance development, which (ii) has significant negative effects on household-level tax morale. Our findings - which are robust across specifications and controls of cross-country fixed differences in tax morale - provide evidence that improvement in government information supply regarding the use of non-tax revenues, beyond annual budget readings and households tax obligations, could significantly enhance tax morale and compliance.
Subjects: 
Tax morale
mediation analysis
asymmetric information
principal component analysis
JEL: 
H26
H31
P35
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-454-4
Document Type: 
Working Paper

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