Purpose-The purpose of this paper is to conduct a systematic review of the factors that shape tax morale. A large range of random explanatory variables identified in the literature as determinants of tax morale are synthesised and structured by drawing inspiration from the institutional theory. Design/methodology/approach-To do this, a systematic search has been conducted using a library catalogue which provides access to more than 400 databases. Findings-The finding is that the institutional theory provides a suitable theoretical basis to explore tax morale. Indeed, all the factors until now identified as determinants of tax morale (except the control variables/socio-demographic characteristics) can be categorised either as belonging to formal institutions or to informal institutions. The most salient factor is trust, with both vertical and horizontal trust positively related to tax morale. Research limitations/implications-The outcome is a call for a more nuanced understanding of not only the effect of formal and informal institutions on tax morale but also how formal and informal institutions interact and alter each other and, consequently, affect tax morale. Practical implications-The paper seeks to encourage governments to start recognising that as low tax morale arises when a gap exists between formal and informal institutions, they need to design policy measures aimed to reduce this gap, rather than persisting with deterrence measures. Originality/value-This is the first systematic review of the factors that influence tax morale using an institutionalist lens.
This paper explains the undeclared economy in general, and envelope wages more particularly, from an institutional perspective as resulting from the asymmetry between the codified laws and regulations of the formal institutions and the unwritten socially shared rules of informal institutions. Reporting a 2013 Eurobarometer survey of the prevalence of envelope wages across 10 Central and East European countries, a strong association is revealed between the prevalence of envelope wage payments and the degree of asymmetry of formal and informal institutions at both the individual-and country-level. The paper then explores the implications for theorising and tackling undeclared work practices.
Drawing inspiration from institutional theory, a small sub-stream of literature has proposed that participation in the informal economy arises from the lack of alignment of a society's formal institutions (i.e., its codified laws and regulations) with its informal institutions (i.e., the norms, values and beliefs of its population). To further advance this explanation, this paper reports a 2013 Eurobarometer survey involving 27,563 face-to-face interviews across 28 European countries. The finding is that there is a strong association between the degree to which formal and informal institutions are unaligned and participation in the informal economy. The greater is the asymmetry between the formal and informal institutions, the more likely is participation in the informal economy at both the individual-, population groupand country-level. A new policy approach for tackling the informal economy which focuses upon reducing this institutional incongruence is then discussed.
This article advances understanding of the prevalence and distribution of dependent self‐employment. Analysing the 2015 European Working Conditions Survey of 35,765 employees in 28 European countries, the dependent self‐employed are found to comprise 4.3% (1 in 23) of the EU workforce, 47% of all those reporting themselves as self‐employed without employees and 31% of all self‐employed. The prevalence of dependent self‐employment, however, is found to have decreased since the previous 2010 survey, is not found to be concentrated among marginalised population groups and is significantly more likely in agriculture, forestry and fishing, arts, entertainment, recreation and other service activities, and the household services sector. The implications for theorising and tackling dependent self‐employment are discussed.
This article advances understanding of the prevalence and distribution of the illegal employer practice of under-reporting employees' salaries, explains this practice and evaluates policy approaches. Analysing a 2013 Eurobarometer survey of 11,025 employees in 28 European countries, one in 33 employees receive under-reported salaries, mostly in small businesses and vulnerable groups (e.g. unskilled workers, with lower education levels and financial difficulties). Explaining this practice, not as an individual criminal act that increasing the risk of detection can tackle, but as a symptom of systemic problems, which require improvements both in tax morale at the individual level and in the formal institutional environment at the country level to resolve, we then discuss the implications for theory and policy.
Purpose
To tackle one of the main negative consequences of the sharing economy, namely, the growth of the informal sector, the purpose of this paper is to evaluate for the first time the impacts of the informal sector on the hospitality industry and then to discuss what needs to be done to prevent the further growth of the informal sector in this industry.
Design/methodology/approach
To evaluate the impacts of the informal sector on the hospitality industry, data are reported from 30 East European and Central Asian countries collected in 2013 in the Business Environment and Enterprise Performance Survey.
Findings
The finding is that 23 per cent of hotels and restaurants in Eastern Europe and Central Asia report competing against unregistered or informal operators, and 13 per cent view these informal competitors as a major or severe obstacle. The larger the business, the greater is the likelihood that the informal sector is considered their biggest obstacle.
Practical implications
To prevent the further growth of the informal sector in the hospitality industry, regulation of the sharing economy will be required. To achieve this, it is shown that state authorities need to adopt both direct control measures that alter the costs of operating in the informal sector and the benefits and ease of operating formally, as well as indirect control measures that reduce the acceptability of operating in the informal sector.
Originality/value
This is the first paper to evaluate the impacts of the informal sector on the hospitality industry and to outline the policy measures required to prevent its further growth with the advent of the sharing economy.
When tackling the undeclared economy, an emergent literature has called for the conventional rational economic actor approach (which uses deterrents to ensure that the costs of undeclared work outweigh the benefits) to be replaced or complemented by a social actor approach which focuses upon improving tax morale. Evaluating the validity of doing so using 27,563 face-to-face interviews conducted in 2013 across Europe, multilevel logistic regression analysis reveals that both approaches significantly reduce participation in undeclared work. When tax morale is high, however, deterrence measures have little impact on reducing the probability of participation in undeclared work and it is only when tax morale is low that raising the level of deterrents has greater impacts, with increasing the perceived risks of detection in such contexts leading to higher reductions in participation in undeclared work than increasing the perceived punishments. The paper concludes by calling for more nuanced context-bound policy approaches.
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