Extrinsic and Intrinsic Motivations for Tax Compliance: Evidence from a Field Experiment in Germany
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Abstract
We study extrinsic and intrinsic motivations for tax compliance in the context of a local church tax in Germany. This tax system has historically relied on zero deterrence so that any compliance at baseline is intrinsically motivated. Starting from this zero deterrence baseline, we implement a field experiment that incentivized compliance through deterrence or rewards. Using administrative records of taxes paid and true tax liabilities, we use these treatments to document that intrinsically motivated compliance is substantial, that a significant fraction of it may be driven by duty-to-comply preferences, and that there is no crowd-out between extrinsic and intrinsic motivations.Citation
Dwenger, Nadja, Henrik Kleven, Imran Rasul, and Johannes Rincke. 2016. "Extrinsic and Intrinsic Motivations for Tax Compliance: Evidence from a Field Experiment in Germany." American Economic Journal: Economic Policy, 8 (3): 203-32. DOI: 10.1257/pol.20150083Additional Materials
JEL Classification
- C93 Field Experiments
- D64 Altruism; Philanthropy; Intergenerational Transfers
- H26 Tax Evasion and Avoidance
- H71 State and Local Taxation, Subsidies, and Revenue
- K34 Tax Law
- Z12 Cultural Economics: Religion
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