Deliberation for Legitimation: Evidence from Experiments on Corporate Tax Avoidance

Abstract

The multi-level theory of legitimacy differentiates between propriety—that is, an individual evaluator’s assessment of the extent to which a legitimacy object is appropriate for its social context—and validity—that is, the construal of appropriateness among different collectives. While the legitimacy literature has clarified that validity may enter individuals’ cognition in the form of “validity cues” which individual evaluators use to form their propriety judgments, it yet has to explore the conditions under which a given validity cue gains predominance in the formation of evaluators’ propriety judgments and overrides the influence of cues stemming from other sources. This question is particularly relevant in public deliberations about the legitimacy of organizations and practices in the context of complex societal problems, where it is not clear a priori whether and how the engagement with different validity cues affects propriety judgment formation. We address this research gap by analyzing the impact of several validity cues (stemming from peers, experts, and social media commentators) on propriety judgments about global tax avoidance. Results of two experiments featuring direct deliberations with representatives of a Big Four tax advisory firm and its critics and indirect deliberations via videos on social media (YouTube) confirm that deliberation affects propriety and offer important insights on how validity cues stemming from different sources affect the (de-)legitimation process. Surprisingly, validity cues stemming from social media commentators are shown to overrule validity cues stemming from either experts or peers, pointing towards serious challenges for deliberate opinion formation in the age of digitalization.