Quality of Government Services and the Civic Duty to Pay Taxes in the Czech and Slovak Republics, and Other Transition Countries

16 Pages Posted: 4 Jul 2004

See all articles by Jan Hanousek

Jan Hanousek

CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute); Charles University in Prague; Academy of Sciences of the Czech Republic; Centre for Economic Policy Research (CEPR)

Filip Palda

University of Quebec at Montreal (UQAM) - Ecole Nationale d'Administration Publique

Abstract

This paper analyses a 2002 survey of the Czech and Slovak Republics, and more limited surveys of Hungary and Poland to conclude that tax evasion is lowest among those who believe that they are getting good quality government services for the taxes they pay. A 20% increase in perceived quality of government services could lead to a 13% drop in the frequency of tax evasion. The present analysis is the first of this sort to indicate that quality of government services influences the willingness to pay taxes. Governments in transition countries who suffer from weak tax collection apparatus may wish to transmit clear information on the quality of their services in order to cut down on evasion.

JEL Classification: H26

Suggested Citation

Hanousek, Jan and Palda, Filip, Quality of Government Services and the Civic Duty to Pay Taxes in the Czech and Slovak Republics, and Other Transition Countries. Available at SSRN: https://ssrn.com/abstract=546924

Jan Hanousek (Contact Author)

CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

Politickych veznu 7
Prague 1, 111 21
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420 2 2421 1374 (Fax)

HOME PAGE: http://www.cerge-ei.cz

Charles University in Prague ( email )

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Praha 1, 116 36
Czech Republic

Academy of Sciences of the Czech Republic ( email )

Narodni 3, 111 42
Praha 1, 117 20
Czech Republic

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Filip Palda

University of Quebec at Montreal (UQAM) - Ecole Nationale d'Administration Publique ( email )

4750 Henri-Julien (#4040)
Montreal, Quebec H2T 3E5
Canada

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