Strengthening Tax Compliance by Balancing Authorities’ Power and Trustworthiness

34 Pages Posted: 25 Oct 2019

See all articles by Erich Kirchler

Erich Kirchler

University of Vienna - Faculty of Psychology; Institute for Advanced Studies, Vienna

Date Written: September 1, 2019


The traditional economic approach to enforce tax compliance rests on the assumption that taxpayers are reluctant to pay their share, are inclined to maximize their egoistic goals by rationally considering audit probability and fines in case of detected evasion, and comply only if enforced to comply. Behavioral economic and psychological insights draw a more complex picture of determinants of compliance and point to differences between taxpayers and their inclination to be compliant, which calls for differential strategies to ensure compliance rather than a one-fits-all strategy. In the present chapter, actors in the tax arena and interaction dynamics are described. Interaction is shaped by power of the authorities and their trustworthiness, which combined, are the underlying dimensions of the tax climate. As conceptualized in the slippery slope framework and its extension, it is argued that a distinction between coercive and legitimate power, and between reason based trust and implicit trust is necessary to understand the interaction dynamics. Subsequently, emotions elicited by power of authorities and their trustworthiness are described, followed by speculations about the impact of anger, fear or feelings of protection and security on compliance. Finally, strategies to shift from control to cooperation are summarized.

Keywords: tax compliance, slippery slope framework, power, trust, emotions

JEL Classification: H2, H26

Suggested Citation

Kirchler, Erich, Strengthening Tax Compliance by Balancing Authorities’ Power and Trustworthiness (September 1, 2019). WU International Taxation Research Paper Series No. 2019 - 03 , Available at SSRN: or

Erich Kirchler (Contact Author)

University of Vienna - Faculty of Psychology ( email )

Universitaetsstrasse 7
Vienna, A-1010
+43 1 42 7747332 (Phone)
+43 1 42 7747339 (Fax)


Institute for Advanced Studies, Vienna ( email )

Josefstädter Straße 39
Vienna, A 1080

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