Norms, Enforcement, and Tax Evasion

CID Faculty Working Paper No. 372

Timothy Besley, Anders Jensen, and Torsten Persson
September 2019


This paper studies individual and social motives in tax evasion. We build a simple dynamic model that incorporates these motives and their interaction. The social motives underpin the role of norms and is the source of the dynamics that we study. Our empirical analysis exploits the adoption in 1990 of a poll tax to fund local government in the UK, which led to widespread evasion. The evidence is consistent with the model’s main predictions on the dynamics of evasion.

Affiliated Research Program: Evidence for Policy Design