The Impact of Informal Institutions on the Tax System Policy Responses due to Covid-19: Evidence from CEECs

Abstract

Informal institutions matter in the context of the tax systems of Central and Eastern European countries (CEECs), especially during the Covid-19 crisis. The purpose of this paper was to investigate the impact of the informal institutions on the stability of tax system policy responses due to Covid-19. The research is based on informal institutions of CEECs such as different values and norms, customs, or traditions. The research methodology focuses on secondary statistical data from 18,785 surveys from the European Social Survey Round 9 (2018) edition 2.0 and from 211 tax system policy responses due to Covid-19 of the OECD for 11 CEECs. The findings show that informal institutions such as trust in others or trust in legal system have a positive impact on the stability of the tax system of CEECs policy responses due to Covid-19.