Does Corruption Culture Matter for Tax Morale? Evidence From Generation of Immigrant Samples

Abstract

This paper studies the role of cultural norms of corruption on individual-level tax morale which are often difficult to separate from the institutional effects. So, it exploited the origin country corruption of an immigrant population in the destination country and find that first-generation immigrants from high-corruption countries reveal lower tax morale in their destination countries. However, the effect of corruption culture attenuates for second-generation immigrants and signifies the importance of local forces and cultural integration. While the corruption experience and destination country corruption are more important determinants of tax morale for the immigrant population, the origin country's corruption norms remain an important determinant of their tax behavior for at least a generation. The results imply that, due to the sticky effect of corruption, the elimination of corruption may not lead to rebuilding the fiscal contract between the government and tax-paying people immediately, and therefore, people may not adjust their tax morale.

Keywords: tax morale, corruption culture, corruption, tax fairness, culture

JEL Classification: K42, Z1, G28, H26, H11