Abstract
This study examines cultural differences in ordinary dishonesty between Italy and Sweden, two countries with different reputations for trustworthiness and probity. Exploiting a set of cross-cultural tax compliance experiments, we find that the average level of tax evasion (as a measure of ordinary dishonesty) does not differ significantly between Swedes and Italians. However, we also uncover differences in national “styles” of dishonesty. Specifically, while Swedes are more likely to be either completely honest or completely dishonest in their fiscal declarations, Italians are more prone to fudging (i.e., cheating by a small amount). We discuss the implications of these findings for the evolution and enforcement of honesty norms.
Highlights
Ordinary dishonest behavior rarely attracts much attention
To what extent can differences in norms and cultures ofhonesty explain cross-national variation in fiscal avoidance and evasion? To address this question, we report data from a tax compliance laboratory experiment conducted in Sweden and Italy in 2013/143
We find that Italians engage more frequently in moderately dishonest behavior, or what Ariely (2012) refers to as “fudging.” By contrast, Swedes are more likely to be perfectly honest in their behavior, but among those Swedes who do cheat, they are much more likely to cheat to the maximum extent possible
Summary
Ordinary dishonest behavior rarely attracts much attention Innocuous practices such as avoiding VAT, double parking, cheating on an exam, and dodging fares on public transport tend to spread, often even in the wake of high-profile, sensationalized scandals. The extent to which citizens engage in tax evasion and tax avoidance varies enormously across countries (Schneider and Enste, 2013). This is true even within European nations that share important features such as stable democratic institutions, developed economies, EU membership and broadly similar tax systems. To what extent can differences in norms and cultures of (dis)honesty explain cross-national variation in fiscal avoidance and evasion? We discuss some possible implications of Italians’ greater tendency to fudge for the evolution and enforcement of honesty norms, with a particular eye toward explaining Italy’s reputation as a “country of cunningness.”
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